Keep What You Earn How We Handle Personal Expenses in a Business
Today I discuss the common issue of commingling personal and business expenses, a practice that many entrepreneurs unintentionally fall into. While it's understandable to make occasional mistakes, it's vital to know how to handle these situations to avoid significant repercussions like audits. I'll share key pointers on why recurring personal expenses should never go through your business account and how to better manage your personal finances. Additionally, I'll explain why it's smarter to increase your salary or distributions rather than mix expenses, and how frequent usage of your business card for personal transactions can cost you more in bookkeeping fees without offering any tax benefits. Tune in to learn strategies for maintaining a clear distinction between your personal and business finances, making informed decisions, and knowing when and how to take aggressive tax positions responsibly.
What You'll hear in this episode:
[0:50] The Reality of Commingling Personal and Business Expenses
[1:25] Key Points on Handling Personal Expenses in Business
[5:25] Mindset Differences and Financial Awareness
[6:55] The Cost of Commingling and Aggressive Tax Positions
If you like this episode, check out:
What Actually Happens If I Commingle Business and Personal Finances?
How Can Three Simple Steps Ease Tax Season Anxiety?
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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.