Should You Pay Your taxes Using Credit Card ?

In Today’s world paying taxes by a credit card is a good idea and it can seem like convenient, natural things if you are filling online but some people paid with a card so they get advantage of the rewards.

Here is the some Question which is on mind of credit card user. Is your credit card reward taxable? What about the credit card bonuses when you open a new account? How can you optimize your credit card expenses if you are a small businessman?

Assume that we earn rewards from our personal credit card and they are not taxable. Because reward earn from credit card may be point or cash back or discount which are not taxable. It is complicated if you have a business. The reward earn in business may be taxable or not its depend on the reward it is in the form of point or cash back.

In the convenience of cards the rewards can be tempting. It is important that if you can’t pay your balance your credit card interest increase. If you receive the points as rewards then you don’t have to pay tax. But if you convert that point to the cash then it can be taxable. So if you are doing business then we recommend you that use the business credit card which earn point not cash.

If you earn a reward on opening a new Credit Card account should not be taxable. But if you convert it to the cash back then it is taxable but if your company requires you to make at least one purchase from the bonus reward then they are doing your favor. Bonus is the just when you opening a new account but it get same tax as if you received a gift. If you get a gift than you have to pay a tax. Then the bonus is also a one type of the Gift so it is taxable.

In the personal interest in which including credit card and installment interest for the personal expenses which is not tax deductible.

If you own a business then the credit card interest may be deductible. If you take a loan for the business than it includes the credit card and installment interest. And it is for the legitimate business expense. So it is not the taxable. So we are advice you to not put your personal expense in the business credit card.

Best way for the business people to make your account on cash basis so it is possible for you to save the tax and timing of your expense and revenue.

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