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Smart Businesses Separate Business & Personal Accounts

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One of the biggest mistakes small business owners make is commingling business and personal funds. They fail to set up separate business-only bank accounts. They may pay for business expenses out of a personal account, or vice-versa.

When tax time rolls around, these entrepreneurs find themselves in a self-created mess trying to sort out personal from business expenses. Additionally, if you’re unlucky enough to get audited, it makes things even
tougher.

It can be especially challenging if the business is structured as an S-corp because the money transferred to the business is deemed capital contributions, and the amounts transferred back to the taxpayer are sorted as being general distributions rather than repayment of a loan. This means the taxpayer can end up with a deemed “wage” even if the business did not make a profit and owe thousands in payroll taxes on the money transferred out of the company.

If you’re one of the 20% of business owners who’s are still not operating out of business exclusive bank accounts, you’re making a mistake. Not only should you set up separate banking accounts for your business, but it’s also recommended that you obtain a credit card that you use exclusively for business-related purchases. Not only will it help you keep track of business expenses, but it will also help you build your business credit score.

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About You

Over decades of working with various types of businesses we have discovered Fisher is the perfect fit for clients who demonstrate the following characteristics.

1

Your business has already proven to be successful through continued growth.

2

Your market has a real need for your product and/or service.

3

You are an independent thinker.

4

You are not a follower but instead you tend to lead or aspire to lead in your market.

5

You understand the importance of learning how to improve your financial navigation.

6

You are teachable despite of your previous success and you continue to seek personal development.

7

You are actively seeking to improve your business.

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