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Join nowI've seen many questions regarding credit cards and although similar, so far I haven't seen one that was exact to my situation.
I started my business with a personal credit card that had both personal and business transactions. At first, I entered each business transaction manually into quickbooks and would write a check to the credit card company for that mount. My accountant said I needed to import all transactions so it can be reconciled. I hesitantly did so knowing it would comingle. I would ultimately write two checks to the credit card, one was from my personal bank account to pay the personal transactions, and the other was a business check to pay the business transactions. However, because all transactions (personal and business) were in quickbooks, the only way to categorize the personal transactions was to put them in owners equity. Which isn't exactly correct since my personal funds never passed through my business bank account. It messed up my tax return because of that. Unfortunately, I was already well into 2021 when I encountered this so I still have some of these transactions in my quickbooks. Is there anyway to resolve without having to enter my personal funds as owners equity (because it never passed through my business account).
I have another way on how you can correctly record your transactions, BrianCpoR.
Sometimes, mixing your personal and business funds usually happens in a business. You'll want to record a personal expense from a business account. To do this, follow the steps below:
Then, reimburse the company. Here's how to do this:
Once done, you can now record your credit card payments. Additionally, QuickBooks automatically downloads the latest transactions and tries to match them with those you've entered in QuickBooks. Learn from this article for your reference: Categorize And Match Online Bank Transactions In QuickBooks Online.
Keep me posted if you have any questions about credit cards. I'll always be here to help you all the time.
Thank you so much for your response. I appreciate it. I have since become eligible for a business credit card and have been using that. All the transactions I referred to in my question are historical. Those are the ones I'm trying to figure out how to record (sorry for the confusion, I can see now that my question description wasn't adequate).
Here's the big part of my problem. I owed over $8000 in personal income taxes. I initially paid that with my personal credit card, then paid the credit card with my personal checking account. This is the same credit card I used for business expenses. I write two checks to the credit card, one for personal expenses and the other for business. The problem is because all these transactions are downloaded into quickbooks, the personal transactions have to be placed into a category. My accountant said to use owners equity (or owner's pay). So now it seems that my business paid me $8000 in a distributions. Which isn't accurate.
I'm thinking it just might be better to scrap all my credit card transactions for the business (and remove all of them from quickbooks) because it skews the numbers too much.
....that is unless I'm misinterpreting your response.
So are you suggesting I could create a cash account and then enter the sum of all the personal checks I wrote? Then use that cash account to record personal credit card payments?
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