Partial Business Expenses, Internet

[Cdmir]

Hello, 

This year I have started my own LLC and recently acquired a business line of credit. I am trying to do everything correctly and putting the clear business expenses on the card. 

In reading these forums, I've read about the itemized version of business expenses and determined that my home internet service would partially meet this requirement, three days of the week when I use it for business. My questions related to this are these:

1. If my Internet costs are $100/month and the use of the service for business is 3 days of the week, my figure for that would be 42.86 per month as a business expense Is that correct?

2. Should I pay for the internet with my business credit card or continue to pay for it with my personal card, knowing that only a portion of the expense is business related? If I do not pay it with my business card, what's the easiest way to show that reimbursement from my business to myself. 

I am the sole member of the LLC, for reference. 

Thanks for your assistance in advance. 

[RSUMan · Accepted solution]

You are allowed to deduct the ordinary and necessary expenses that you incur in connection with your LLC business.

Internet access is certainly an ordinary and necessary expense.

1.  Your allocation of 3/7 of your monthly internet bill is a reasonable method to allocate the expense since you are using the internet 3 days of every week (3 divided by 7 multiplied by your $100 monthly bill equals $42.86).

2.  Pay for your internet with your business credit card.  A single member LLC is a "disregarded entity" for IRS purposes so you will file the business on Schedule C.  There is no need to implement a reimbursement process; just adjust your total expense downward for internet access when entering your expenses for the business on Schedule C.

I do like the idea that you are working to make your business accounting simpler by getting all expenses on the card; that is why I suggest that you pay for the internet on the card, that way you will not forget to enter internet expense when you do your tax return.