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4 Replies Last post: Apr 22, 2008 9:48 PM by Anne68

Paying business expenses from a personal account

Apr 13, 2008 7:36 PM

helpmeplease 1 posts since
Apr 13, 2008

I have a question. I am an independant contractor, My work is online and I dont get a 1099 misc or anything like that. I also have my own home office. I dont have a seperate bank account for my business expenses, such as office supples, office equipment and things like that. what i am needing to know, is it ok if i pay for those things with my personal account, can i still take them as a tax write off. I keep my recipets and circle all of the items that I bought for the business. Is this allowed?

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LUCKIEST 4,680 posts since
Aug 6, 2007

1. Re: Paying business expenses from a personal account Apr 13, 2008 7:43 PM

Paying business expenses from a personal account.
Welcome to this web site. How do you keep track of income and expenses??
Do you have an Accountant??
*Yes if *you keep receipts and circle all of the items that I bought for the business, it is
a good start. A separate bank account would be better.
A computer system of income and expenses is even better (like Quicken or Quickbooks).
File your taxes by April 15
Good luck, LUCKIEST

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Wingman 57 posts since
Oct 10, 2007

2. Re: Paying business expenses from a personal account Apr 13, 2008 7:54 PM

Hi helpmeplease,

Luckiest is right. Ideally you will have a separate account for your business versus personal funds.

Not knowing how large your operation is currently and what your plans are for the future, it's best to get things started correctly from the get go. If you have the opprotunity to grow your business in the future , it may be a real mess trying to separate everything later on.

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Lighthouse24 1,786 posts since
Oct 10, 2007

3. Re: Paying business expenses from a personal account Apr 14, 2008 12:49 AM

Yes, it's "allowed" (but sounds like extra work).

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Anne68 3 posts since
Apr 22, 2008

4. Re: Paying business expenses from a personal account Apr 22, 2008 9:48 PM

This is perfectly legal and not a problem at all.

Simply debit the expense account and credit a payable account called "Due to Shareholder" or "Due to Owner." Then when you repay yourself, debit the payable and credit cash.

But whatever you do....make sure you follow the above!!!

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ForumsTaxes and Payroll

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Paying business expenses from a personal account

Apr 13, 2008 7:36 PM

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