It’s important not to commingle business and personal transactions for several reasons:
- Tracking the financial condition of your business is more challenging when you have unrelated personal transactions you need to isolate and remove monthly or at the end of the year when you are filing your tax returns. Also if you want financing in the future most traditional lenders will want to review your business financials.
Business Tax Deductions-
- Overlooked Business deductions can occur when you are not closely keeping up with your business expenses that can qualify for valid tax deductions
- If audited your business could be classified as a hobby if you have these business transactions in your personal bank accounts
- Piercing the Corporate Veil – you may be personally liable for business debts if there is no real separation from your personal and business assets.
- You want to have an audit trail clearly supporting your income and expenses for your business
If you are not able to open a separate Business account then simply open another account that only has your business transaction activity in it until you can get an official business bank account opened. Stellar Ledgers can assist you with tracking your business activity and reporting the financial health of your business.