Can you reimburse yourself?

Question

• Can I use my personal credit cards for business expenses and somehow expense it to my LLC bank account? I really like the points benefit I get from those credit cards (i.e. Chase Sapphire Reserve, AMEX Platinum, etc), so I would love to be able to maximize that while avoiding co-mingling. If this is okay, how do you "reimburse yourself"? Are you using services like Expensify?

Alecia Loveless · Answer

@Carrie Zhang My accountant has NEVER in 28 years of working with him allowed me to deduct meal expenses. For some reason to him this is a red flag to the IRS.

I’ve just accepted it over the years and come to the conclusion that the nominal amount I spend on legitimate business meals is ok to take as a loss.

As others have said I don’t travel to exotic locations to invest, my stuff is fairly local so the actual need for a business meal is low.

Kevin Sobilo · Answer

You need to ask your accountant. I only track the mileage driving to specific properties. I'm not traveling to exotic locations on business.

Carrie Zhang · Answer

Thanks for answering! I didn't realize I can open store credit cards with my LLC. What about purchases that are more like admin and non-property specific? Like business travel/meals, etc? Do you just charge it to one of your properties at random?

Kevin Sobilo · Answer

@Carrie Zhang, I think the answer is no. That looks like co-mingling to me.

Also, that is short sighted I think. What are the largest expenses you expect to charge to a credit card? My guess is materials from stores like Home Depot or Lowes. If so, get a business credit card at those places for your LLC (with you as personal guarantor).

At Lowes you will enjoy 5% off any purchase at the register which is more than you are likely to get back on your personal card.

PLUS! If you are making larger orders you can make those through their pro-desk or through their pro-site and get discounted pricing and probably average 15% off! You can only get that pricing if you use their credit card.