Separating business and personal finances isn’t optional — it’s essential for clean bookkeeping, accurate tax reporting, and liability protection.
Why It Matters
Mixed transactions make bookkeeping take twice as long, create tax preparation confusion, weaken LLC liability protection, increase audit risk, and obscure true profitability.
Step 1: Dedicated Business Account
Open a business checking account using your EIN. Most NJ banks offer free small business checking.
Step 2: Business Credit Card
Use a dedicated card for all business expenses. Creates a clear paper trail.
Step 3: Regular Owner Draw or Payroll
Set up a consistent schedule rather than pulling money ad hoc.
The Rule of Thumb
If in doubt, keep it separate. One extra bank transfer is easier to manage than untangling a year of mixed transactions.
Disclaimer: The information provided is for general educational purposes only and does not constitute tax, legal, or investment advice. This content is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. Tax outcomes depend on your specific facts and circumstances. Viewing this material does not create a CPA-client relationship. Personalized advice is provided only through a signed engagement letter.
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