We country folks have a different scenario concerning our living & working locations. We live & operate our business @ physical address & get our mail @PO Box (different city). This sometimes causes confusion when I apply for membership at a bank or credit union. If they do not ask for a different mailing address on the application, they will sometimes mail literature to the physical address & the membership gets returned to sender.
But you are making a sizable profit from your credit card venture. (from what I read) But I would not consider it a business & just hope that IRS doesnât get involved.
As mentioned above, if thereâs intent to make a profit, itâs a business. It doesnât matter if you think you donât have a business, itâll be up to the third party to decide if they ever find out what youâre up to. Especially in this digital age.
This thread goes to rewards/cash back credit cards. I realize such cards are central to the success of genuine MSers. I want to express my respect and admiration for such persons, the MS community generally. You folks are innovative, creative, and just frankly pretty darn cool!
Because I do not engage in the forms of MS practiced with expertise by the aforementioned community, Iâm unable to comment with any authority regarding taxability of profits so earned. My gut feel, however, tells me your vulnerability is nil.
As for myself, engaging as I do in a sort of second tier version of MS, perhaps second class would be a more apt description, I have even less vulnerability than the professionals. And certainly none of us is engaged in a business. Nothing could be more self evident.
dont know where you get your info⌠CC rewards are NOT taxable according to IRS. Cash and points are NOT taxable. Been in this MS biz for 5 yearsâŚnever a w2 for these rearwards. But new bank acct bonuses are taxable.
I think you are misunderstanding @Bend3r. Iâll rephrase what he said but it my words where I think heâs right. He can correct me if Iâm interpreting his view incorrectly. Weâre not saying CC rewards are taxable, generally speaking. Weâre saying that manufactured spending could be considered business activity by the IRS if they were interested in pursuing MSers. And if MS were classified as a business, since the CC rewards ARE the profit, rewards could therefore be considered taxable. As far as I know, the IRS hasnât pursued anyone for this who has written about their experience or fought it , so there is no publicly accessible documentation from the IRS or tax court interpretation to back up our belief. That doesnât mean that weâre wrong, though. It just means it hasnât happened⌠yet. There are lots of things that are in the gray area with respect to taxes. This is one of them. Thankfully, the IRS is so behind on bigger things worth way more money that I donât predict theyâll have the manpower or technology to go after even the biggest MSers for a decade. By then, who knows what MS will look like.
LAST UPDATE: I was wrong about what could cause an issue. Chase didnât want my County Business License, they wanted my Articles of Incorporation, Certificate of Formation, IRS EIN Letter, or Fictitious Name Statement. Since I donât have any of those (they arenât needed in my state for sole proprietors with the ownerâs name in the business name), I got another letter. Thankfully, they donât staff their phones with idiots. I called the number, confirmed my info, gave my reference number, got put on hold, the CSR spent 2 minutes reviewing what I faxed in 11 days ago, and came back on the line to say I was approved for a $9,000 credit line. Now just to meet the minimum spend. Shouldnât be an issue, but I always get paranoid about it for the first month. Hope you get your referral points @Bend3r.
I hadnât added info because already looked figured out. But when I got the business address verification letter for sole proprietor, all I took in was a utility bill. They didnât require anything else from me. I took it in rather than mail and they verified it over the phone at the Chase bank. No idea if mailing would have been easier. Good you got it all sorted.
Freedom paid me my 5% on my first purchases with the funds credited Jan. 1, 2019, quicker than promised) which were primarily charitable donations made to the Foundation for Metabolic Cancer Research through the Paypal site (so the charity did not have to pay fees for using credit cards).
Their failure to use account numbers on checking accounts that are of the usual length, complicated setting up ACT transfers, but it can be made to work for some firms, with Freedom knowing what to do with the funds received (at least for two banks) designed for checking (from when payments to the VISA card can be made).
A wire transfer also got to them. A phone representative was not helpful, merely telling me questions about wires could only be answered by the sending firm only (I had some confidence in the ability of some banks to process wires transfers to them, but wanted to know what would happen when Freedom received the funds, and how long it would take them to get the funds into the right account, especially since the funds would come in with only your member number attached).
Experimentally, wire instructions submitted about 2PM on Dec. 31 got funds into my checking account that day, and could be transferred to pay off part of my credit card debt, so I could use the card later on Dec. 31 to make a large donation in time to create a tax deduction for 2018, and hopefully get the 1% Paypal giving Fund bonus.
They seem to have no way to initiate ACT transfers, but a couple of banks could make them if given the account number (which is your member number) for your checking account. As discussed in the thread on brokerage bonuses, Merrill lacked the ability to handle their non-standard checking account numbering system on their online sites, although BOA at least accepted the instructions (not tested to see if it works however), since BOA charges for transfer out over $1,000, and appears not set up to handle customers without cell phones, or unwilling to disclose their numbers.
Amex Blue Cash Everyday card has $150 back on $1K spending in the first 3 months. It is 3% back on groceries with no annual fee. If you spend $6K at the grocery store the first year that works out to 5.5% cash back.
Slickdeals offers an additional $125 bonus if you apply from their site, meaning $275 total.
With a combined $275 bonus, If you spend $6K at the grocery store the first year that works out to 7.5% cash back.
This card also has Introductory 0% APR for 15 Months on purchases.
Just curious, what is the logic of combining opening spend bonus with the category into a single percent?
In that case, would an equivalent statement would be: Chase ink preferred, 80k pts ($800 cash or more as transfer) $95 fee after $5k purchases. 3x points on travel, shipping, internet cable and phone, 1x everything else.
If you spend $5k at Taco Bell in the first three months, that works out to 15.1% cash back on tacos.
Or substitute: âIf you spend $5k at grocery stores in the first three months, that works out to 15.1% cash back.â
(arbitrary card and unrelated purchase âcategoryâ example)
It seems to not make sense to me to express things that way, but my brain seems to be wired unusually, so maybe Iâm just not seeing it.
I see $250 for Blue Cash Preferred, and $200 for Blue Cash Everyday.
Amex T&C has this clause: âif you cancel or downgrade your account within 12 months after acquiring itâ, so plan to pay for the second annual fee as well for the BCP.
Itâs something to consider when getting a new card. For example: the Amex Preferred card nets a current cardholder 4.4% back on groceries, If one applies for the Amex Everyday card and uses it instead, one would net 5.5% back on groceries the first year.
