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Safely Use a Personal Credit Card or Bank Account for Business Expenses

One of the most common tips you hear about budgeting and expense tracking for small businesses and freelancers is to keep your personal and business accounts separate. When you run your business expenses through a separate account, it’s easier to keep track of your expenses. That makes it so you don’t miss out on claiming any business expenses come tax time and that you don’t inadvertently claim personal expenses as business expenses.

If you’ve incorporated your business, it’s a separate entity from yourself, and in most cases, that means that you aren’t personally liable for the business’s debts or expenses. If you use your personal credit card to make business purchases, though, you may be personally liable for the bill. Even if the business goes under, you still have to pay off that card because the debt is in your name. If the debt were on a business account, you may be able to write it off.

That said, there are no laws preventing you from using your personal account for business expenses, and if you’re a freelancer or small business owner just getting started, you may end up doing just that. To use your personal bank account or credit card safely, always make a note of your business purchases. Also, keep receipts and detailed records so that you aren’t faced with a jumbled mess when filing your taxes. When you need to make a really large purchase for your business, consider opening a separate business account or credit card at that time.

Using your personal account for business expenses is not ideal, but you can do it safely if you stay organized.

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