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Subject:
Tax deduction on a credit card that someone else pays for
Category: Business and Money > Small Businesses Asked by: matth1000-ga List Price: $8.00 |
Posted:
02 Mar 2006 23:51 PST
Expires: 06 Mar 2006 17:33 PST Question ID: 703145 |
A friend of mine, Adam, has his father pay his credit card bills, as part of his compensation for working for him part time. He also owns his own business. Can he take tax deductions on the business expenses he incurs on that card? |
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There is no answer at this time. |
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Subject:
Re: Tax deduction on a credit card that someone else pays for
From: research_help-ga on 03 Mar 2006 06:06 PST |
I believe that the rules state that you must have actually paid for something if you are going to take a deduction for it. It seems like this arrangement of the father paying the son by paying for a credit card is likely to avoid payroll taxes that would be due should the father pay the son by a regular paycheck. As they say, you can't have your cake and eat it too. This person is probably cheating the IRS by having this payment arrangement, so I don't think you'd be able to use the arrangement to avoid even more taxes. Eventually this will catch up to them. |
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