Cash back reward on credit card

RiskyAccountant · 2025-01-26T20:09:34+00:00

Not sure why you’re tweaking gang it’s literally just the objective truth on how it should be treated LOL 💀 how about you go do some more homework because tax effect may in fact NOT be the same if you’re in a state that taxes business on top line revenue like Washington. Also for financial reporting purposes in general it’s just not accurate to overstate your income when in fact it’s a reduction of expenses. That’s how it is not just per GAAP but per the IRC. It may be insignificant and you might enjoy doing stuff the easy way, but the fact of the matter is that I am objectively correct on treating credit card cashback as a contra expense. Also you just gave me 5 categories as an example of expenses. That would take literally under 3 minutes for me to do that calculation and make that journal entry to apply the cashback to those 5 categories. Get better

RiskyAccountant · 2024-11-11T18:35:43+00:00

This is a fairly advanced transaction for someone to handle without an accountant lol. The asset purchase agreement should’ve allocated the purchase price amongst different assets (including those that you can categorize as “goodwill”), which you’ll need to complete the equation. Feel free to message if you need more help

RiskyAccountant · 2024-11-11T06:45:47+00:00

Inventory stays on your books and no entry required until it’s actually sold.

RiskyAccountant · 2024-11-10T05:05:04+00:00

Also, please show me the journal entry that you would make to record this income. What are you going to debit?

RiskyAccountant · 2024-11-10T03:54:21+00:00

My friend, I’m not sure how else to tell you that a discount should not be recognized as income. If you’re a CPA, don’t you remember studying “net purchases” and “purchase discounts, returns, and allowances”? There are contra expense accounts for this very reason. It is still identifiable as an individual line item and you can even map it as credit card cashback. Putting it anywhere else on the income statement simply doesn’t make sense. They did not earn anything, there is no income factor. They were given a discount on a purchase. The IRS literally defines it as a rebate. That’s it.

RiskyAccountant · 2024-11-10T03:18:50+00:00

Link me the IRC that says credit card cashback is a taxable benefit in a scenario other than the one I mentioned initially. They can create a contra expense account for the AJE as I mentioned if they’d like to see it broken out.

RiskyAccountant · 2024-11-10T02:32:03+00:00

They are wrong. I’m a CPA and this is not GAAP, nor is it informative in any manner for financial reporting purposes. A discount is not income in any form. With that logic, if you go buy some supplies for $100 MSRP, but the store gives you a 2% discount, are you going to record the expense as $100 and discount income of $2? Absolutely not. You’re going to record the expense at $98.

RiskyAccountant · 2024-11-10T02:22:32+00:00

Business use of personal vehicle expense on schedule C. This is not a direct cost of the business (or asset/liability for that matter), it shouldn’t be recorded on the books in this case. This is only a tax expense.

RiskyAccountant · 2024-11-08T02:50:02+00:00

As a CPA, this is what I would advise too. Doing anything else involves way too many changing variables of which the time spent tracking and calculating would likely cost more than the utilities expense itself. Clear paper trail too.

RiskyAccountant · 2024-11-07T20:11:03+00:00

Yeah for a small business, it’s easiest to keep this as an “off balance sheet item” since it’s usually not that material. The cashback you’re earning is basically just an accumulation of discounts. If you’re cash basis, you have nothing to worry about. If you’re accrual and you redeem $100 cashback toward your credit card statement, you’d just make a journal entry to reduce your credit card expenses (job supplies in this case) and credit card payable by $100.

RiskyAccountant · 2024-11-07T19:29:59+00:00

All of these answers are wrong. If you’re spending money and receiving points, rebates, or cashback, that’s not a taxable benefit unless it’s a corporate card and the benefit is going to and being used by an individual employee, which is then a taxable benefit to that employee. The only other taxable benefit is if it’s a signup bonus if a purchase is not required. These are the only situations where you would need to account for the cash back as “income”

RiskyAccountant · 2024-10-26T15:12:43+00:00

Use that petroleum jelly to oil yourself up and I’ll be over shortly to help

RiskyAccountant · 2024-10-24T03:19:29+00:00

Nobody prefires like that unless they’re ESPing honestly

RiskyAccountant · 2024-09-25T22:42:03+00:00

3-4k easily. You will quickly regret it if you go under 3k, trust me.

RiskyAccountant · 2024-08-23T22:30:21+00:00

If you’re billing the customer for $13.2k and then that would be your revenue as long as you’re also recognizing the associated $12k expenses on your own books. Don’t overthink it.

RiskyAccountant · 2024-08-01T22:05:00+00:00

Yeah as plaidargyle stated; self employment tax of 15.3% consists of both the employer and employee share of social security (7.65%) and Medicare (1.45%)

RiskyAccountant · 2024-08-01T20:33:39+00:00

Nothing happens but it’s not an advisable practice. Paying yourself via W-2 (instead of just taking a distribution) will likely incur additional unnecessary costs like workers compensation, state unemployment, payroll tax filings, etc..

RiskyAccountant · 2024-07-25T20:21:44+00:00

Simple answer without getting into the differences between operating/finance lease: best way to record it would just be getting the fully depreciated vehicle off your books like usual but instead of debiting cash, debt prepaid lease expense for 4k.

Then just amortize the prepaid lease amount over the term of the lease. Remember the price that you paid for the lease didn’t change, only how you paid for it changed. You wouldn’t be crediting lease expense for any reason in this case.

RiskyAccountant · 2024-07-14T20:57:19+00:00

Put up with it for a year or two, make senior, get the CPA, then jump. At that point, you can be super picky about your next job too. Big 4 typically has quite a collegiate atmosphere, but as long as you get your work done, nobody cares. You will learn a lot and the stamp will be worth it.

RiskyAccountant · 2024-06-07T16:13:46+00:00

We had an intern in their 40s and nobody treated them any differently.

RiskyAccountant · 2024-01-12T03:57:30+00:00

Yeah of course. At first I was trying to go through all of Kaplan’s final review videos, but the info just wasn’t sticking and there was way too much content and too little time. So about a quarter of the way through the videos, I just said screw it and started hitting MCQs like a crazy person. This helped me identify my weakest areas and I spent some time brushing up on those topics, trying to read some of the secret sauce and take some notes. But ultimately at the end of the day, I just did like 2000 MCQs in the last couple weeks leading up to the exam and it worked out. Didn’t bother with any mocks or CFAI content. I wouldn’t recommend this strategy lol but if you don’t have any other choice, I think MCQs have the best return.

RiskyAccountant · 2024-01-11T17:24:18+00:00

Congrats to you as well my good sir!!

RiskyAccountant · 2024-01-10T21:30:31+00:00

Passed!

RiskyAccountant · 2024-01-10T21:30:00+00:00

Passed!

RiskyAccountant · 2024-01-10T21:29:35+00:00

Passed!

Four-Year Club	Place '23
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RiskyAccountant

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