Bus Exp pay by cash or credit card?

[VolvoGirl]

If you charge an Expenses that is the same as paying Cash right?  Like in December 2019 when you charge a supply but don't pay the credit card until January.  You can include it on 2019 tax return, right?

Does it say that anywhere in the IRS?  I looked at publications 535 & 538 but it just says cash.  Where does it say by credit card is the same as cash?

[Anonymous_]

---

@VolvoGirl wrote:

Where does it say by credit card is the same as cash?

---

That is fairly well settled (see the link below). Rev. Rul. 78-39

https://bradfordtaxinstitute.com/Endnotes/Rev_Rul_78-39.pdf

Essentially, it is the same as taking out a loan from your bank and then using some, or all, of the principal to pay business expenses.

[VolvoGirl]

That's for medical expenses.  I need one specifically for business expenses to answer someone in another forum.

[Anonymous_]

---

@VolvoGirl wrote:

That's for medical expenses.  I need one specifically for business expenses to answer someone in another forum.

---

The Revenue Ruling deals specifically with medical expenses, but you missed the general rule:

....when a deductible payment is made with borrowed money, the deduction is not postponed until the years in which the borrowed money is repaid.....

See also https://casetext.com/case/granan-v-commr-of-internal-revenue

[mmschroedercpa]

I believe this is only fairly well settled for Medical Expenses in Rev Rul 78-39 not business expenses.  Which is why folks can't find this in any of the publications for Bus Expenses.

[Critter-3]

When you buy a product you get a receipt for the payment and it is expensed in the tax year listed on the receipt.  So no matter if you pay cash, by CC or take a loan the expense is always taken in the year the seller got paid.  Follows the same situation as the medical expense deductions.