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I started an LLC in 2017. Can I write off a business expense if I paid using my personal funds?

I've been using my personal account to make business expenses because the business hasn't earned enough to cover some charges. I just want to make sure I can write them off, and I kept the receipts to show the expenses. 

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3 Replies

I started an LLC in 2017. Can I write off a business expense if I paid using my personal funds?

Yes, it's not an absolute necessity to pay expenses from a separate business account, especially right when you are starting out.  You just need to keep very good records of what business expenses were paid from the account and save receipts.  It is advisable to open a separate account before too much time goes by, because it's much easier to show your intent to earn a profit and to track your expenses from a separate account.  You can also deduct bank costs for the business account from your income for the business.

I started an LLC in 2017. Can I write off a business expense if I paid using my personal funds?

We should make sure this is a single member LLC.  

If this is a multi-member LLC the personal expenses will be handled a little differently.  End result the same, but there is one additional factor involved.  The expenses paid from personal funds will either be treated as a loan to the multi-member LLC or as a capital contribution.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.

I started an LLC in 2017. Can I write off a business expense if I paid using my personal funds?

It is normal that you will have to "seed" the business account until it becomes profitable and you must keep good records of all the personal money being deposited to the business account and all the reimbursements to yourself from the business so if you are ever audited you can prove that the money being put in your personal account is not taxable income.
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