←back to thread

My sixth year as a bootstrapped founder

(mtlynch.io)
1071 points mtlynch | 2 comments | 16 Feb 24 15:07 UTC | HN request time: 0.437s | source
Show context
celestialcheese ◴[16 Feb 24 20:41 UTC] No.39402666[source]▶
Weird to see CC rewards as income. If you're taking cash-back or applying to balance, I'd move to a points-based rewards card ASAP now that you're making money and don't need it to live off of.

Our business has a significant amount of cc spend because of ad networks that don't charge processing fees, and high CC limits acting as nearly free lines-of-credit. This generates something like ~$100k annually in points value for us.

We got some opinions from a few tax attorneys and CPAs a while back on how to handle this, and the consensus was clear that as long as points stay in the programs and are redeemed for flights/hotels/etc, they won't need to be recorded as rebate to expenses or as income.

Applying the rewards against your balance should be recorded as rebate against expenses rather than income. Also, worth noting that some cash back programs have started issuing 1099s, depending if it's a "Bonus" or percent of spend.

replies(2): >>39403283 #>>39405724 #
1. ilamont ◴[17 Feb 24 02:24 UTC] No.39405724[source]▶
> Our business has a significant amount of cc spend because of ad networks that don't charge processing fees, and high CC limits acting as nearly free lines-of-credit. This generates something like ~$100k annually in points value for us.

Same for us. One of the business cards we use gives 5x rewards on online ad spend, which translated to lots of free flights and hotel rooms over the years.

During the early part of the pandemic when points were not usable, we converted them to cash or credited them to existing expenses (the card gave a 25% bonus to use this feature).

replies(1): >>39432542 #
2. celestialcheese ◴[19 Feb 24 17:47 UTC] No.39432542[source]▶
> During the early part of the pandemic when points were not usable, we converted them to cash or credited them to existing expenses (the card gave a 25% bonus to use this feature).

Man this was one of the biggest silver linings on the pandemic. Chase allowed groceries and home improvement purchases to be paid for with points. 1.5x redemption. Paid for all the materials for my home renovation with them.