If you purchase airline miles for a business trip with your own card, how do you calculate the value for reimbursement
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Dear Your Business Credit,
My boss purchased air mileage with his private funds first, then used this mileage when purchasing a business-class ticket for business travel. I have asked the company to reimburse this expense (i.e., $3,230 for a business-class round ticket). I requested this amount, based on current market price, which fluctuates. How can I attach a proof document to the company in this case? Your detailed advice on this would be truly appreciated at this moment. Thank you!! – Joanne
It’s important to account for business expenses properly – but as you’ve found, that can be tricky if you’re not an accountant or bookkeeper. And properly recording the use of credit card points can be even more confusing than accounting for monetary purchases, given that many of us are unfamiliar with how to do this.
Fortunately, Sally Balson, managing member of Balson Bookkeeping Co. in Madison, Wisconsin, was available to offer advice.
“If the executive purchased a ticket for business travel he would have a receipt for that purchase,” Balson wrote in an email. “The receipt is directly reimbursable from the company when submitted with an expense report. The fact that he used air mileage should be irrelevant as long as his receipt shows the date of the purchase, the item purchased, and the purchase price.” Reimbursements are subject to company policy, of course.
Balson added the credit card statement itself is not considered a receipt in the eyes of the IRS. The receipt showing the purchase price is, so that is what your boss should submit as proof of purchase.
Whether the purchase price of a ticket has fluctuated since the original purchase is not relevant when it comes to reimbursements.
“An employee cannot get reimbursed for more than the value of the purchase,” says Balson. “For example, if they have enough points for a $500 ticket but the ticket they purchase is $300, then $300 is all that can be reimbursed because that is the value of the purchase.”
Generally, it’s best to use one credit card for business and separate cards for personal expenses, but sometimes that’s not practical. For instance, some businesses accept Mastercard and Visa but not American Express.
Business owners or employees who do have to use their personal cards in such circumstances should keep good records. Save the receipts or scan them into an app such as Expensify, so you don’t lose them. In the case of plane tickets, there usually is a digital receipt of the purchase that you can save and print out to accompany your expense report.
In case you have lost track of expenses you’ve put on your personal cards from a few months back, it is easy to create an online account for virtually any card and download PDF versions of your statements. Just make sure that you keep this information secure, and if you are emailing it, thoroughly cross out any personal information, such as your account number, so identity thieves can’t steal that.
See related: Keep your personal credit separate from your job