How to Use a Dedicated Business Credit Card

If you use one credit card for all of your expenses, you might find it difficult to separate business from personal expenses later on. Using a dedicated business credit card will not only help you to stay organized, but it can also make a large difference once tax season roles around. A dedicated business card is a credit card that is used only - no exceptions - for business expenses. Read the following tips to learn how to use a dedicated business credit card.

Dedicated Business Credit Card: Choose Your Card with the Highest Interest Rate
If you have several credit cards, it is often best to use the one with the highest interest rate as your dedicated business card. Although you cannot deduct interest on personal credit cards, interest earned on business expenses is almost always deductable. Annual fees are also deductible, so that should factor into your decision.

Dedicated Business Credit Card: Charge Slips
Make sure that your dedicated business credit card allows you to receive copies of all the charge slips in addition to your monthly statement. If it doesn't, you will have to be careful to save them at the point of purchase. You will need these charge slips either for your business expense account or for your taxes.

Dedicated Business Credit Card: Frequent Flier Miles
If your business requires that you travel, you might want to get a dedicated business card that allows you to enroll in a frequent flier program. You'll earn free miles with your business expenses, which is always a plus. If you don't travel, consider a card with other benefits, such as reward points or cash back. You might as well be earning some kind of return when using a dedicated business card.

Dedicated Business Credit Card: Keep it Separate
Store your dedicated business credit card in a separate place from your personal credit cards. If you accidentally use it and then forget to record the purpose for the personal purchase, you could wind up in trouble with your boss or - worse - the IRS. Make sure that your spouse and any other family members also understand that it is a dedicated business card.

Dedicated Business Credit Card: End-Of-Year Report
Many credit card companies provide card holders with an end-of-year report that categorizes expenses related to different purposes, such as entertainment, travel and office supplies. Try to find a credit card that supplies this kind of report because it will be much easier to handle your taxes when you have it.

Dedicated Business Credit Card: Employer vs. Taxes
When making business purchases on your credit card, it might be a good idea to note who will be reimbursing you for the expense. If is something like mileage, which will go on your employer's expense report, make a notation on the charge slip or in your register. If, along the same lines, you will need to deduct it from your taxes, you should write that down as well. It will help you to keep the two separate and to fill out expense reports and itemized tax statements.

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