Accounting question-RE: Recurring Credit Card Charges

Hello All;

This is my first year trading full time and I have claimed mark to market status.

My question is, how do you prove expenses from monthly credit card charges(ie. QCharts, RavenQuote, etc.)?

Yes, I have my credit card statements. However, there are no receipts or invoices sent from these companies. In an audit, I understand that the IRS wants wants to see actual invoices.

Has anyone run into this situation?

TIA!

kempo

 

Yes, you can definately deduct credit card interest charges, so long as those charges were bonafide charges for cash advances/convenience check withdrawals used to fund your trading activities.

However, it's propably NOT a good idea to use the same credit cards that you fund your trading with, for regular shopping. Keep them separate.

Otherwise, should you get audited, you'll have a difficult time proving which interest came from shopping charges, and which came from your cash advances.

By the way, you don't have to "prove" anything. Your credit cards statements are your invoices.

 

You don't need a separate "business" credit card, just isolate the card(s) that you have funded your trading with, from those that you make regular purchases with.

Chances are, a bank would not issue you a "business" credit card without you having provable income for at least a year or two, which I'm of course assuming you don't.

You don't need to add any additional hassle to your life by having to open separate accounts. And, by your previous post, I'm assuming you've already taken out the cash from one or more cards.

Good luck!

 

Thanks alot guys!

Keeping the credit card charges from trading on a seperate card is a great idea (too late for most of this year though).

I'll just copy my statements and highlight the trading expenses. Fortunately, I don't have any interest payments to seperate.

Thanks again,
kempo