Cashing credit cards (신용카드 현금화) is popular among many people because they provide fast and easy access to money when in an emergency or when funds are needed. It is very useful because many people use it, but there are some things to be careful of. Getting cash with a credit card can solve an urgent need for cash, but it can also negatively affect your credit score in the future.
Let’s learn how to cash in your credit card.
Are Credit Card Cash Advances Taxable?
One of the most frequently asked questions is whether cash advances from credit cards are taxable. The straightforward answer is: in most cases, cashing of a credit card itself is not treated as taxable income. When you get a cash advance, you will be using your credit limit just like you are getting a loan. Therefore, because it is money that you must give back, that’s why it is not considered as income.
Micro-Payment Cashing: How It Factors into Tax Reporting
Micro-payment cashing involves making small payments several times. This can be particularly useful for paying off credit card cash advances over time. The main benefit of micro-payment cashing is that it allows for the splitting of the payment, enabling you to go for cashing without putting too much pressure on your financial status.
But how does this relate to taxes?
If you are making business related expenses using a micro-payment cashing service, it is advisable to keep very good records. For example, if you are using a credit card cash advance to buy goods for your business and pay back the credit in smaller portions. Here, you may be in a position to offset the interest charged on the cash advance against your business expenses. However, it is always recommended to keep all the records because the IRS may ask for proof of the cash advance being used for business purposes.