Credit Cards And Taxes; Am I Doing This Right?
I hope I can explain this right. This i my first year doing rehab projects and from what I have learned is not to use your own money, so I have been using credit cards to fix up these houses. Everything I buy something I mark credit card in my accounting program, then every month after that I write off the percentage (since it is only bussines expenses on the credit card). Now what happens if for some reason the house does not sell by the end of the year? I mean it shows in my program that I am in the hole because of the credit cards but really I have not paid any money out of pocket other than the minimum payment each month. Am I keeping track of this correctly? Kind of confused when it comes to the credit cards and how to keep a record of them without it showing that I have paid all of this money out when actually I haven't yet; at least not until the property sells. Hope this all makes sense. Thanks for your help. 
I think I explained things wrong above. I meant to say every time I buy something I will mark credit card down and the amount that I charged. For the remaining months, I will record in my program the interest that the credit card charges me.
I do not understand the question.
Assuming you take the advice to have a card that you only use for business (no personal charges on the card at all). Then all the interest paid on the card in the year can be applied against the business income when computing the tax gain.
Granted there are some issues if all of this is really just you vs. if there is a corporation that owns the property.
Consider having an accountant or reading more books on the topic when using tax software.
John
[addsig]
John,
I think the question is whether she can deduct expenses (including interest) which she has not yet paid. The answer depends on whether you elect to be a cash basis or an accrual basis taxpayer. Or, more strictly whether you wish to put together an entity (s-corp or LLC) which would be an accrual basis taxpayer and pass income and expense through on that basis. As to which method is more appropriate to you-- see your accountant. Accrual basis accounting is more complicated but sometimes has tax advantages.
John, that is exactly what I was trying to ask. I didn't explain it very well so thanks for the advice.
I mean, commercialking; that is exactly what I was trying to ask. Thanks for the advice. (too early in the morning yet).