Subscribe
Notify of
guest

17 Comments
newest
oldest most voted

cm
cm (@guest_296419)
September 18, 2016 13:49

For me, this just crosses a line of complexity that I’m not even willing to consider. It’s annoying enough to open some of these accounts when the reps goof on funding it on time or whatever, and having to stay on top of what was opened when and so forth, but *opening a business in your state*? Even if the process outlined above only took four hours, there is something unnerving about having a business open. What tax or legal complexities will this produce down the road? How much time will I have to put into researching that? Am I *sure* about what I find out?

NoonRadar
NoonRadar (@guest_296445)
September 18, 2016 15:14
  cm

Yeah these are some of my concerns as well about something like this. Even if you do a lot of research and get some kind of OK-ish by a CPA or attorney, as far as likelihood of trouble. Having a formal (registered) business pretending to be something while in actuality only does bonuses via simulated business activities might trigger flags with banks and/or government. So yeah this stretches this financial hobby’s limits.

For one thing, I’d advise Don to keep meticulous records in case you’re ever investigated and the burden of proof is put on you to show what’s what.

The other concern, although just financially, could be costly if it turns out you have to pay taxes on payroll and employees you’ve simulated, as well as potential penalties.

I’m sure there’s others who do this to one degree or another, but there’s not a whole lot of clear info about potential consequences. Also those degrees can make the difference as far as flying under radars or not. For instance someone who has a legitimate business might trigger less flags for a second bonus-only “business” that someone who doesn’t.

adam
adam (@guest_295962)
September 16, 2016 13:31

Why Michigan? Because it is where you live, or because it is easier? Could you shed some light on the choice of MI?

Mark O
Mark O (@guest_295999)
September 16, 2016 15:05

I am pretty sure he lives here (Michigander myself) since he wrote the hacking Michigan Lottery post too.

Gary
Gary (@guest_296043)
September 16, 2016 18:01

Ha the whole time I was reading the article I too thought he lived somewhere else and Michigan was easier than most states. Will just assume it’s his home state.

adam
adam (@guest_297100)
September 20, 2016 15:53

Thanks for sharing! But for whatever reason, I did not get notified of the replies even though I subscribed, hence the late acknowledgement…

mmgfarb
mmgfarb (@guest_295943)
September 16, 2016 12:12

How hard is it to get approved for a business CC, say the ink plus, with a new business using the EIN?

Chuck
Editor
Chuck(@chucksithe)
September 16, 2016 12:52

5/24 is the biggest issue, I think, for most.

mmgfarb
mmgfarb (@guest_296007)
September 16, 2016 15:40

I don’t think I explained myself well, I meant how hard is it to get approved for a business card without using your social, in order to get the sign up bonus twice. Is it even possible to sign up with an LLC without giving your social?

Eric
Eric (@guest_296002)
September 16, 2016 15:17

You gotta fill out an application.

Gman
Gman (@guest_295924)
September 16, 2016 10:56

Now how long will it take till all reddit trolls kill business cards by going insane with cc business applications…

NoonRadar
NoonRadar (@guest_295922)
September 16, 2016 10:50

Do you/others know whether a bonus-only business might trigger IRS/other entity review and/or taxation, assuming you don’t tie or file any actual business revenue to this and only use it for credit card and bank bonuses? I don’t know if for instance if money moving in-and-out of this business account from other banks (for bonuses) or other such activities might trigger a review, and if so whether there might be any financial or legal consequences.

mike
mike (@guest_296030)
September 16, 2016 17:16

i was also curious about this.

William Charles
Admin
September 17, 2016 00:04

You’d need to speak to a tax professional about this, we cannot give this type of advice.

Phillip Dampier
Phillip Dampier (@guest_295916)
September 16, 2016 10:42

One note of caution about chasing bank promos. Even if you establish a business presence in Michigan, that does not by itself qualify you to chase Michigan regional bank promos unless you have a verified mailing address in that state. Some credit unions and smaller regional banks reject apps if your driver’s license is from out of state (several credit unions I’ve dealt with), others demand a residential or business street address within 50 miles of any branch (Webster Bank, Central Bank, etc.).

So while this will help with a national bank to get business checking, it will not help people chase regional bank bonuses in a state where they do not have an address of a business location or residence to put on the app. Banks and Homeland Security are sensitive about identifying banking customers thanks to terrorism/money laundering, so trying to skirt this with a mail drop can bring the wrong kind of attention if they don’t realize you are a bank promo hunter, not Mr. Terrorist or Drug Dealer trying to move money around under false pretenses.

William Charles
Admin
September 17, 2016 00:04

This is more about advice for people living in Michigan, rather than creating a business in Michigan purely for bank bonuses.