How ready are you for an audit from the IRS when it comes to your business? Most people like to think they keep pretty decent records, but if the IRS were to come knocking would you be confident they are not going to rip apart all of your accounting and find out you’re wrong?

One way to make your numbers a little more reliable is to have business credit cards at work for your business. By separating your personal and business expenses on two different credit cards, it is easier to stand by your spending and not be accused of paying for personal things on your business account or visa versa.

IRS Auditors Notice

It’s important to note that the IRS notices if you are using one account for business and personal expenses. This shows up as a red flag on their radar. After all, it’s really easy to take a credit card charge for something personal and list it as a business expense. If you come up on their screen for an audit, they may well make you back up all of the purchases you made to prove they were indeed for your business, since you made them on a shared credit card.

Less Liability

If you do have some sort of tax problem at the end of the day, having your business and personal expenses separated may make the process a little easier. When the IRS comes to look through your financial records, if you have personal and business credit cards being the same thing they will look more closely into both of your filings. If you were only having tax problems on the business side, but they notice something not quite right about your personal taxes, you could be in double trouble.

Credibility

One thing many people run into when dealing with the IRS is the government wants to know if your business is just a hobby or of it is in fact a real and operational business. There is a thin line between the two, but if they think you are not running an official business, you well could be forced to eat all your expenses. Having business credit cards and other business related accounts makes you look more credible as a business instead of as a hobbyist.

Record Keeping

The final reason you may want to have separate business credit cards for your company is to be able to pay less to your accountant to wade through the mess of paperwork you give them every year. By having the best business credit cards, all of your expenses can be in one place and lessen the time it takes your accountant to sort things out.

Apply for a Business Credit Card!