How to Separate Business and Personal Finances for Taxes?
How to Separate Business and Personal Finances for Taxes? Let’s be honest—if you’re running a small business, things can get messy fast. One day you're buying coffee for a client meeting, the next day you're using the same card to grab lunch for your kid. It may seem harmless in the moment, but when tax season hits? It's a nightmare. Blurring the line between business and personal finances doesn’t just cause headaches—it can lead to missed deductions, inaccurate reporting, and potential IRS red flags. Luckily, with a little strategy and some day-to-day awareness, you can separate the two cleanly. Doing so won’t just save you time; it can also save you money. Here’s how to make that divide—and stick to it. 1. Start with a Separate Business Bank Account This is the first and most crucial step. Open a business checking account and dedicate it solely to business transactions. No shared use. No gray areas. Whether you’re a sole proprietor or operating as an LLC, keeping ...