Can I Claim?
If I have a sole propr. set up as my form of business, is it still necessary to set up a separate business acct. Can I pay expenses through my personal acct and claim them on my 1040 next year. All opinions are welcome
[addsig]
You are better of making a loan to your business form your personal accounts.
Business and personal accounts are best to be separated
At tax time, do you really want to go through a whole year of records to pick out the business expenses? I've found that a separate checking account and credit card (one that gives you a year-end summary) are well worth it.
Legally you can run the funds through the same account.
The value to keeping them separate is both in the ease of preparing your taxes and later if you get audited you can more easily defend the position that business funds where not use for personal benefit.
There is even the chance that you might want to sell the business and having clear records will help with valuations.
In effect, be lazy now and mix the transactions means you will pay later in time, effort and likely extra taxes because you can not show what should have been a business expense.
John
[addsig]