Tax Question - Valid Business Expense? Please Help if You Can.

I hope I have this in the right business section. I'm trying to figure out how to mark this in my business accounting and was hoping someone here could help.

I received a $200 gift card to Barnes & Noble so I went and bought some business books with it. I paid no cash, just used the gift card. Can I consider this as business expenses for my business taxes? Is the gift card still consider cash?

I understand a CPA would best anser my question, but again, was hoping someone with good knowledge about business taxes could answer it.

Thank you.

 

IMO, yes.

You converted a personal, quasi-cash asset into busainess asset. Now this presumes that the books in question would be considered as a "qualified business expense".

Be sure to save the receipts.

 

did you get this card for buying a lot of book from B&N or from someone else?

If you have bought a lot of books paying from your business account and then recieved the card, then you can make this $200 as a discount to what you have already paid (which was books expense)

If someone gave you this card, then no you can not expense..

 

Was the gift card issued to your business or to you personally?

 

You could claim the card as revenue and the books as expense and they will offset each other. If it's a personal gift than I probably wouldn't even include it in my tax calculations. Either way it seems like it's not adding or subtracting from your tax bill.

...but I am just some guy in an Internet forum.

 

Tells the guys from the IRS: "but the guy on the internet said it was ok!"

 

Business Expense!

 

you can not do that..

 

If its only 200$, I wouldn't really worry about it unless you arn't making that much at your business...200$ won't do significant damage or help to your taxes...

 

The $200 is considered "capital" as you are using personal assets. The books are a business expense.

If you are a sole proprietor, it would be "contributions" on your equity section of your balance sheet.

I have over 20 yrs bookkeeping experience, PM me and we can go over it. It really depends on what type of entity your business is considered.

 

this may work.. but in general it does not worth time worrying about it as was mentioned before the impact of the income tax is so insignificant

 

It depends on the situation. If TanItAll's net profit is only $1000 for the year and the business is a sole proprietorship, then it would be a significant amount as it would also effect the amount of self-employment tax on the 1040.

IMO, every little bit counts.

 

I got the gift card this year, so the question popped in my head how this would be marked in my books. I received the card as a personal gift, but I then and bought some SEO books and web design books for my website businesses.

From my understanding above, if sole proprietor, I would just add it as a contribution and then mark the books as expenses?

thanks for everyone's replies so far. I somehow pictured myself explaining to the gov that I get all my information from the internet so it must be true..."Google my DP post to verify sir..."