Regardless of your business size, you know how important it is to separate your business finances from your personal finances. This minimizes accounting and tax issues as well as makes it easier to handle your accounting books. Managing a business is already time-consuming, so it helps to avoid extra stress by handling your finances with the help of a CPA in Atlanta. The best CPA knows the importance of handling your finances for your peace of mind. They have helped many businesses with bookkeeping and accounting. Below are ways to separate your business and personal finances:
Establish Your Business
Incorporating your business is important. Whether you prefer to present your business as an LLC, S Corp, or C Corp, make sure you establish it with the right structure. Establishing a separate legal business entity protects your personal assets from business debts, lawsuits, and losses.
Open a Checking Account for Your Business
Opening a business checking account allows you to make business purchases through it. With this, you get a clear picture of your expenditures. This is beneficial when tax season strikes because all you do is examine your statements.
Acquire Business Credit
When you pen business credit or debit cards, you do not need to utilize your personal accounts for business-related transactions. This is the easiest way to separate your business and personal finances. Additionally, your business credit card can help establish stronger credit scores for your business and could boost your borrowing power. This can help you qualify for loans that have lower interest rates.
Establish a Salary for Yourself
As the boss of your company, you can make it official by paying yourself. Establishing a salary for yourself means writing a check from the checking account of your business and depositing it into your personal accountant. It allows you to easily monitor your payroll finances and make sure your salary is handled professionally.
Keep Your Receipts
Keeping physical receipts is the best way to separate your business and personal finances. Pull out old-fashioned folders and keep your receipts there or upload them online. This can be quite handy when IRS audits have to happen.
Track Shared Expenses
Remember that a lot of the expenses of your business are tax deductible and you may have certain expenses to write off. Thus, always separate your business and personal purchases. You can do this by using your business cards. Separating your expenses will make it easier for your CPA to file your taxes and protect yourself by having a financial record ready at all times.
