How do you guys manage your business accounts with your personal accts...
 

for tax purposes?

I just started a business bank account, so I will be putting all my checks into my business account.

But for tax purposes then is it OK to withdraw for personal things like food and rent? I dont understand how I have a business account but still be able to pay for personal things.

you should get a proper accountant.

you need to pay yourself from the company..and then pay your rent with that etc....but go see a real accountant

I know but im trying to avoid that. I just spent $1,000 on a lawyer to set this up, another $500 on the actual filing, then $750 for Visa fees, then money for this and that. Im trying to save some $$ by seeing what other people do.

As Phoenix says, the cleanest way to do it is to pay yourself a salary from your business account into a personal account, and pay all your personal bills/expenses/whatever out of that. Have separate savings accounts and CC accounts for business/personal too.

the bigger your revenue is, the more you need the ass kissing way too expensive (but REALLY important & truly needed) accountants, lawyers and tax consutants.
:2 cents:

I take a monthly draw from my business account to my personal account. At the end of the year, there is an 'on paper' paycheck that covers part of the draw.. the rest is just considered an owner payout. Since I'm a sole owner of an S-Corp it makes it easy.

You've gone to all the trouble of setting up a business and a business bank account, don't muddy the waters by paying for personal items out of that account.

best way would be to have 2 separate check cards that you use

pay yourself from the business and use that money for personal things

if you work at home, figure out the square footage of your work area and get the % of that from the total square footage of your house - lets say 15% for example

then when its time to pay for utilities, cut 2 checks to pay the bill - 1 personal (85%) and 1 business (15%)

it is sort of a pain in the ass because sometimes you want access to money that you know you have but haven't yet paid yourself with...

sometimes i slip up and use my business card for personal things... at the end of the year your accountant will be able to handle all of that for you... its all the same money since you are the only one employed by the business - just "different pockets" really

thanks makes sense. thanks a lot

I got lucky in the sense that I'm an accountant by trade (Pre-PK) so I know what to do in most cases. I hand the P&Ls and balance sheets to the CPA firm at the end of the year and let them do the tax returns so I don't have to stay up on the ever changing tax laws.

right now i just log into my bank of america business account, then just transfer money to my personal account..

ALL my business expenses are from my business account, so end of year ill just add up all expenses, subtract from revenue, and pay tax on the rest..

But i hope what im doing is OK.. i basically move money from biz >personal as i need it.. and any money i send to my personal account is income.

if theres a lot of extra cash sitting in my biz act, ill just use it to buy some assets.. domains.. websites.. etc.. no need keeping 200k cash and paying tax on it.. better off spending 180k of it to buy existing domains/websites.. and pay tax on the 20k :)

there's money to be made (or saved) in that knowledge :thumbsup

You can also switch some of your personal bills onto your business such as cell, internet, phone, car lease, etc.. Saves on taxes you would have to pay if you pulled the money through a pay cheque

Interesting Thread, i would agree with the above general consensus is, keep personal and biz separate, pay yourself like an employee out of the biz accounts and then take it from there. What yys said is also a good idea, especially with these type of bills, every month and they just become a pain, so throw them on the biz, phone, internet, even car lease is a great idea *wish i hada thought of that before getting a loan for mine.

Bump for others to post how they manage biz / personal accounts...

I have an account at a separate bank for broker use

If you can't or don't want to afford an accountant, then you just wasted the other money. :2 cents:

Don't ever mix your business and personal money.

get an accountant. We do paydays and cut ourselves paychecks. When you start mixing it all up you are asking for trouble. What I did when I started, I called a bunch of cpa's one returned my call. I said I know nothing about accounting, I have questions what would you charge for an hour of your time. He told me,answered all my questions and has been my cpa for 9 yrs and I have sent him probably 10 clients. When Im happy with something Im very chatty.

I just started a business account also. I was going to get it merged with personal, bu ta friend advised against it.

He also told me to pay myself as an employee with checks to the personal account. Another tip he gave me was to make sure that the business has 0$ profit to ensure no tax liability for the business, but don't do it too many years in a row.

Personal accountant is a big help.