I just started a business as an LLC and have set up a business checking account as well as a separate PayPal account. My concern is that I think my PayPal account was initially set up as personal using my SSN. Secondly, I will have access to both my business checking and my personal checking through one login with the bank. Will I run into issues when transferring money from the business account to my personal account? Do I need to create a pay stub using something like Quickbooks for generating payments to myself for my business?
Thanks for even thinking about this issue! In all my years as a CPA this is one of the issues that gives me the most grey hair. (thank G-d for Clairol).
It is best practice to keep separate accounts for your personal and business expenses. I understand that sometimes, especially in the beginning of any business this is difficult. The awesome thing is you now did set up a separate account, Way to go! Using Quickbooks is an awesome way to keep track of your expenses. If you paid for something with your personal account you can expense the item and then create a loan account "due to Jabberbox21" (or your real name). You can then repay yourself when you have the funds. Best practice, of course is to keep everything separate. For example, you cannot deduct credit card interest on a personal tax return but you can deduct credit card interest on your business return. I even have two Uber accounts, one linked to my personal credit card and one to business, it makes life much simpler.
Thanks for even thinking about this issue! In all my years as a CPA this is one of the issues that gives me the most grey hair. (thank G-d for Clairol).
It is best practice to keep separate accounts for your personal and business expenses. I understand that sometimes, especially in the beginning of any business this is difficult. The awesome thing is you now did set up a separate account, Way to go! Using Quickbooks is an awesome way to keep track of your expenses. If you paid for something with your personal account you can expense the item and then create a loan account "due to Jabberbox21" (or your real name). You can then repay yourself when you have the funds. Best practice, of course is to keep everything separate. For example, you cannot deduct credit card interest on a personal tax return but you can deduct credit card interest on your business return. I even have two Uber accounts, one linked to my personal credit card and one to business, it makes life much simpler.