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Article Date:
September 2009

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Proving Federal Tax Deductions with Credit Cards

You charge a business expense to a credit card. Is the credit card statement adequate proof of the expense? No!


Part 1: Proof of Payment


Taxpayers often make the mistake of thinking that a charge to a credit card is proof of a tax deduction.


The business taxpayer instead needs to think of his or her credit card as a checkbook. When you write a check for a business expense, you use the canceled check to prove that you paid the money. When you charge a business expense to a credit card, you use the credit card statement as proof of payment.1 Proof of payment is only one part of what you need to prove your business tax deductions.


The credit card rule works like this: On the day of the charge, you2



pay the vendor with money that you borrow from the credit card company, and


incur a liability to repay that borrowed money to the ... Log in to view full article.

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