If Incomes and Expenses Equal Each Other, Will I Owe Taxes on Zero Profit?

Tiberian · Jul 13, 2020

This is more of a tax question, but I've look all over and haven't really found an answer to this question.

I've been using my business credit card to pay for advertising costs for clients of mine, and getting reimbursed via invoice. Did I fuck myself over here? Should I have had their card on file? Now it looks like I'm on the line to pay additional taxes for this.

Cash Builder · Jul 14, 2020

Tiberian said:
This is more of a tax question, but I've look all over and haven't really found an answer to this question.

I've been using my business credit card to pay for advertising costs for clients of mine, and getting reimbursed via invoice. Did I fuck myself over here? Should I have had their card on file? Now it looks like I'm on the line to pay additional taxes for this.

Surely the costs being spent on the credit card and the money coming in through the invoices will cancel each other out, therefore no tax will have to be paid?

ToffeeLa · Jul 14, 2020

Cash Builder said:
Surely the costs being spent on the credit card and the money coming in through the invoices will cancel each other out, therefore no tax will have to be paid?

Depends if s/he is liable for sales tax/VAT on services?

Tiberian · Jul 20, 2020

Cash Builder said:
Surely the costs being spent on the credit card and the money coming in through the invoices will cancel each other out, therefore no tax will have to be paid?

Man I'm so dumb. Well this is the thread for this kind of stuff I guess. Definitely will get a CPA next year but you're right, it does cancel out.

ToffeeLa said:
Depends if s/he is liable for sales tax/VAT on services?

Thankfully no, but it's enough of a hassle for me that I'm definitely going to change my methods going forward.