When you are a business owner, there are several challenges that you are going to be continually trying to manage. One of them may be trying to differentiate between your personal and your business finances. Managing these two different things can be overwhelming at times. However, if you have an understanding of deductions that you can take advantage with both of these elements in your life, you will be much happier. Mark Dicus & Company is here to talk about your business and your personal finances and how you should work to keep them separated.
What is the Big Difference Between Personal Finance & Business Finance?
There are reasons why it is advised to keep your business and your personal finances separated from one another. This can make it much easier if you are facing an audit from the IRS. You may find that it makes it much easier on yourself and your mental health to have this separation as well. Following are a couple things that can help you keep your business and personal finances completely separate from one another.
Get Two Different Bank Accounts
The first thing you should work on is getting a separate bank account for your business as well as one for your personal use. This is one way to make sure the money for one isn’t getting mixed in with the money for the other. You can see a clear difference between the two to help you keep it all straight.
Get Two Different Credit Cards
We live in a world that revolves around credit. Having credit cards is a great way to not only make purchases that you need to, but you can also get rewards with many different types of credit cards. There is a word of warning with credit though. It can be easy to get in over your head if you aren’t careful and paying off the balance every month. You will find that many credit cards offer special cards to cater to business owners. They come with their own set of perks, and you should take advantage of them. This will help you keep your business purchases off of your personal credit card as well.
It is Bad to Mix Business with Pleasure
Make sure that when you are going on trips, going out to dinner or doing other things that you personally find entertaining that you are doing keeping the personal activities separate from your business deductions. You can always write off different activities that have a legitimate tie to your business, just make sure you’re keeping all the receipts for it.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you are having a hard time managing your small business and your personal finances, you can call on Mark Dicus & Company to help you keep it all straight. We can help you prepare your taxes for both so that it all makes more sense to you. We have the experience needed to know of any deductions you should be taking advantage of. Call us today!