Accounting & Bookkeeping & Small Business Forum

Guest · Posted: Wed Oct 20, 2004 9:35 am Post subject: Personal Credit cards in S-Corp

How do I treat personal credit card advances put into an S-corp. Client borrows $5,000 on personal credit card and puts the money into their S-Corp.

Payments are made with S-corp funds and also there are extra business purchases charged to the card.

Is the credit card interest deductible by the S-Corp?

please email me with any thoughts or where I can read up on this activity.

Thanks

Guest

Credit card companies usually won't issue a card to a new company, so owners/shareholders have no other choice than to use their personal card for business purposes. Just treat the card and proceeds as if it were a business card. You should only deduct the interest associated with the business charges. I would recommend that the director get a separate card for business from personal. Exclusively use the one for business, then the interest issue is not complicated. If he/she won't do it, and the interest is significant, then you'll just have to do the math.