| Do you know what you would do if the IRS came | | | | at the spending of your business is that if you have |
| knocking at your door to do an audit? If you are like | | | | your personal and business expenses on the same |
| most people you would likely panic and hope there | | | | card, you are going to have to let them see your |
| was nothing out of order in your tax returns that would | | | | personal spending as well. This could lead to them |
| cause problems. But are you sure? You may be afraid | | | | finding not only problems with your business filings, but |
| some of those 'guesses' you made about some of | | | | also your personal IRS returns. Next thing you know, |
| your billing and purchases that were on your personal | | | | you could be in the midst of two audits. Instead, if you |
| credit cards could get you in trouble now. | | | | are using business credit cards, they can only look at |
| This is one reason you should have business cards for | | | | your business accounts and you can keep them out of |
| your business instead of using your personal cards for | | | | your personal spending. |
| this purpose. While it may seem easier to just use one | | | | Professional Credibility |
| card for everything, it could cause you a lot of | | | | Having business credit cards instead of using your |
| problems in the long run. | | | | personal credit card for your expenses allows you a |
| Getting the Auditor's Attention | | | | new level of credibility in the eyes of everyone, |
| You may be thinking the last thing you want to do is to | | | | including the IRS. While you may not think this is very |
| get an auditor's attention, but that is exactly what you | | | | important, it is. You want the IRS to see you as a |
| may be doing if you are combining your personal and | | | | business. If they don't, they may think you are just a |
| business expenses on one credit card. When the IRS | | | | hobbyist and they can decide you can't deduct any of |
| sees this kind of activity it serves as a red flag for | | | | your business expenses. |
| them that things may not be as organized or cut and | | | | Keeping the Books |
| dry as they seem. This could end up with you getting | | | | The final reason it's smart to have business credit |
| an audit notice so you can prove to them that the | | | | cards is that these will afford you the ability to make |
| charges on your personal card that you claim are for | | | | record keeping easier. You also will likely be able to |
| business really are what you say. | | | | save some money on those accounting fees you pay. |
| Lower Your Liability | | | | If all of your expenses are on one statement at the |
| One thing to keep in mind when the IRS comes to look | | | | end of the month, they are much easier to sort out. |