Keep Your Business & Personal Expenses Separate

Business Owners – Do not pay your personal expenses from your business accounts. Transfer the money to your personal account and pay your personal expense from your personal account. Why? Because the accounting work will be easier and if your business is a Corporation or an LLC you could have a problem protecting your personal assets in a lawsuit. Attorneys will use the payment of personal expenses as a way to pierce your corporate veil. If the corporate veil is removed you will not receive the Limited Liability and personal assets are subject to being attached for use in the settlement of a lawsuit.

In the Event of an audit the IRS will reclassify these payments as wages on a corporation and guaranteed payments if you are a Limited Liability Company. This will increase your taxes.

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