Level 5

How to deal with the business credit card cash reward on business tax return?

Forum|Forum|1 year ago
January 23, 2025
3 replies
13 views

Hello,

I have an LLC and I filed form 1120-S for it. I received a $1,000 cash reward from my business Bank of America card this year. Not sure what's the best way to handle this $1,000 cash reward on form 1120-S. Can I not enter this $1000 cash reward on form 1120S? or Is it better to count it into "other income" which makes it taxable?

Thank you for sharing your wisdom!

Practice Advice

A

ajcctax

Level 4

I will make the entry: Credit: other income Debit: cash in bank

sjrcpa

Level 15

You used the card for business, incurring deductible business expenses, right?

So when you get this $1,000 it is a refund of some of what you paid. Taxable income.

The more I know the more I don’t know.

W

workhard2022Author

Level 5

yes, I used the business credit card for deductible expense items, then I received a total of $1000 cash reward in 2024

BobKamman

Level 15

You probably had to spend something to qualify for the sign-up bonus, but there's no definite connection between deductions for what you spent and the $1,000. You could have met the spending limit in December 2023, then received the reward in January 2024 and canceled the card in February 2024. Report it as "other income," but are you sure the bank is not issuing a 1099 to your SSN? (They have another week to do that, you know.)

W

workhard2022Author

Level 5

thank you for sharing. It's not a sign-on bonus. it is a cash reward for using a business credit card for business expenses.

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