Is there a bright red line separating “business” expenses and “personal” expenses ?
Question by paladin: Is there a bright red line separating “business” expenses and “personal” expenses ? In his former defence force job he had been allowed to use the company card for personal expenses as long as it was repaid and he had assumed it was the same at Sydney Ferries, he said.>> For example if some arsehole ICAC person was coming after you, wouldn’t you perhaps run up a lot of “personal” expenses seeking legal advice ? Best answer: Answer by E P What do you think? Answer below!
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Wouldn’t these be “business” expenses also ?
Yes. There is.
Ignorance is no excuse. Nor is the transfer of the culture of one work situation to another. We are required to be informed. Life requires it.
No! it is Great Wall of China that separating business and personal expenses.
Yep. About as bright a red line as you can have.
Obviously the “he” you are referring to was already corrupted by his prior job. And I do hope that they expand the inquiry into the defense force job area he came from.
The short answer is: It depends.
Seeking legal advice would be a business expense if the legal advice was directly related to a business matter.
There is a difference between tax laws and company policy. In your example, it appears that the person had used the company credit card for personal expenses. There is nothing illegal about this. I’ve used several corporate cards for personal expenses and it is not illegal or against IRS regulations. Some companies allow a certain amount of personal expenses while others require repayment and others will deduct personal expenses from the next pay check. If you fill out an expense form detailing the nature of each expense, the company can identify personal expenses.
The person in the example should not have assumed the same expense policy.
Now in the example of an ICAC person “coming after you” and “seeking legal advice”, this is a little more complicated. If someone is suing you for work-related actions, then they could also be suing your employer. In that case, your employer might pay legal costs or have your case handled by the company lawyer since it would be one suit with multiple defendants.
If you were seeking legal counsel for work-related actions, then it would be a business expense for tax purposes but not necessarily ok to use the company credit card to pay the lawyer. This would depend on the company’s expense policy.
If the person was self-employed, then they can set whatever expense policy they want, but that policy is subject to tax regulations. The company might say they will pay for a meal, but the IRS says deductible expenses for “Food and Entertainment” is 50%. The company can still pay for the whole thing, but only deduct 50% as a cost of doing business.
Yes there is and I am sure that 99% of people know right from wrong on this subject they just choose to ignore it, nobody cares about excuses even though sometimes they are valid
Been there done that and no I don’t want to do it again. Good luck with that.