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I run a single member LLC in the state of Virginia and, for tax purposes, I am trying to figure out calculating profit/loss at the end of the year when using a business credit card.

In the first year I took a loss setting up the company. I am on track to take a loss this year as well. The product I am working on releases January 2024, and I will start making some amount of revenue from this.

This year I have been spending all my money on a business credit card and paying it off in full the following month. I need to know when the money is considered to be spent, either when the charge hits my card or when I pay it off. I would prefer to keep my spending in 2023 so my revenue in 2024 would almost all be profit.

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  • Is the LLC a cash basis tax payer? I would expect it to be.
    – Bob
    Dec 11, 2023 at 1:33
  • @Bob I don't remember explicitly seeing that phrase on any paperwork. The company finances are combined with my personal income tax, I believe it is considered cash basis taxpayer.
    – Elder Tree
    Dec 11, 2023 at 1:47
  • You might want to look at your Schedule C
    – Bob
    Dec 11, 2023 at 2:19
  • Unless you explicitly chose to not have it cash-basis, it most likely is. If it is a disregarded entity - then it's you, and individuals are very rarely using accrual accounting.
    – littleadv
    Dec 11, 2023 at 5:44

1 Answer 1

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Assuming that the LLC is a cash basis tax payer then the date at which you put it on the card is the date you paid for it for tax purposes. I site the following URL in support of my answer:
A link related to payments

If you are an accrual basis tax payer then it is the date you legally owe the money. Large corporations must use the accrual basis method. Small companies can but they do not have to and generally do not.

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  • Please include a quote from the linked page, so that if the link rots the answer is still good. Dec 11, 2023 at 11:08

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