Ask an Expert
Using a credit card for business and pleasure
Expert: Fred Watkin CA
Tom asked:
When a credit card is also used for both personal and business expenses, is there an easy way of sorting them out? I'm mostly concerned with gas and meal expenses. I'm not sure if there is a percentage that can be used to calculate this?
Fred Watkin CA answered:
When a credit card is used for both personal and business expenses, the best way to sort them out is to keep all of your receipts, and when the statement comes at the end of the month, sort them out accordingly. Gas expenses should be allocated on the basis of use of vehicle. For example, if you use your vehicle 50% business (based on mileage use), then 50% can be claimed for business.
The meal expenses should be clearly identified ON YOUR RECEIPT as to why it was incurred. This can be done by simply writing the name of the business/client you are meeting with. Meal expenses are only deductible at 50% of the total expense.
About the author
Fred Watkin is a chartered accountant with a small boutique CA firm in Brampton. His firm does tax planning, business development, R&D, and compliance services for individuals and small to medium sized businesses in Ontario. The company website is www.watkinassociates.com