Personal Credit Card for Business use

[bomber317]

Does anybody know if I need to report rewards I earned on my personal credit card on purchases made as a business expense?

For example, purchasing 10k worth of equipment, expense to the company, reimbursed, received points for 10k worth of purchases.

I tried looking it up on google and couldn't find anything, and I vaguely remember reading or hearing that you had to.

[I_H8_Crawford]

Technically I think you have to, but no one does.... your call I guess.

[pylon]

wait till firstlady hears about this!

[Madman]

Damn taxi drivers.

[burn_this_city]

Originally Posted by pylon

wait till firstlady hears about this!

CRA is on speed dial.

[return to the red]

Originally Posted by bomber317

Does anybody know if I need to report rewards I earned on my personal credit card on purchases made as a business expense?

For example, purchasing 10k worth of equipment, expense to the company, reimbursed, received points for 10k worth of purchases.

I tried looking it up on google and couldn't find anything, and I vaguely remember reading or hearing that you had to.

The better question would be why are you even contemplating this?

[Ace]

The rule is that you are allowed to receive the points tax free as long as it's not an attempt to earn additional renumeration

When you do not control the points, your employees do not have to include in their income the value of the rewards they received or enjoyed from the points they collect on these business trips, unless:

• the points are converted to cash;
• the plan or arrangement between you and the employee seems to be a form of additional remuneration; or
• the plan or arrangement is a form of tax avoidance.

If any of the conditions above are met, the employee has to declare the fair market value of any personal rewards he or she received as income on his or her income tax and benefit return.

http://www.cra-arc.gc.ca/tx/bsnss/tp.../menu-eng.html

You need to decide if you are example 1 or 3 here:

http://www.cra-arc.gc.ca/tx/bsnss/tp...xmpls-eng.html

Example 1 - Personal credit card - Taxable benefit

Pauline’s employer allows her to use her personal credit cards whenever possible to pay for business expenses, which the employer then reimburses to her. To maximize the points earned, Pauline used her personal credit cards to pay for various employer business costs, including travel expenses of other employees.
We view this arrangement as a form of additional remuneration provided to Pauline. Pauline would not normally pay for employer business costs other than her own work-related expenses, incurred in the normal course of working. She would not normally cover the cost of business expenses of other employees. Pauline will have to calculate the fair market value of any personal reward she receives when she redeems the points. She will then have to declare the value as income on her income tax and benefit return.

Example 3 - Personal loyalty points card - Non-taxable

Frank has a personal credit card he uses for both personal and work-related expenses. The card offers loyalty points which can be cashed in for travel rewards, but which cannot be redeemed for cash. Frank decides to redeem some of the points to take his family on vacation.
Since Frank controls the points, and this arrangement does not seem to be a form of additional remuneration, he does not have to include the value of the points earned from work-related expenses as income on his income tax and benefit return.

[socktape]

I know that it used to be that if you redeemed points/miles that you earned through business transactions you were to claim the amount that it would normally cost for the item/ticket as revenue. So if that 10k worth of points bought you what was normally a 300 dollar flight to Vancouver you had to claim the $300 as income. That was a while ago... not sure if it has or how it might have changed since then.

There you go in the post above.... it has changed a bit...

[bomber317]

Originally Posted by return to the red

The better question would be why are you even contemplating this?

We don't have a corporate card assigned to our group and we occasionally need to purchase equipment that is needed immediately. So we purchase it on our CC and expense it back to the company.

I have probably put about $500 this year on my CC for purchases like this.

I have tried to set it up with our vendors that I can just create a PO and get them to send me an invoice, but my company won't give me authority to do that.

I know, that doesn't make sense since I now have to expense the changes to them anyways.

[First Lady]

Originally Posted by pylon

wait till firstlady hears about this!

Despite having a hard-ass rep to maintain....I'm actually cool with this.

[Traditional_Ale]

Originally Posted by First Lady

Despite having a hard-ass to maintain....I'm actually cool with this.

And so are we!