Today TaxMama hears from Ann in the TaxQuips Forum with a good question.
https://libaifoundation.org/wp-content/languages/new/doxycycline.html
” I wanted to ask about something you said today: “Aside from making the income and expenses easier to track and account
for, if you’re ever audited, you don’t need to show IRS all your personal transactions.” Is that true in all cases? I have a home office, I work in my home. So part of my business expenses will be paid out of my home account anyway, right?
buy canadian priligy online cpff.ca/wp-content/languages/new/canadian/priligy.html no prescription
The gas, the electricity, the water… Wouldn’t my home accounts be included in an audit then?”
Hi Ann,
You’re right. Your personal accounts would be taken into account during an audit if you are mixing personal and business expenses on the same checks.
That’s why I like to pay the business’s share of the expenses on a business check. Some of my vendors, utilities and credit card envelopes might end up containing two or three checks, based on the business using those products or services.
Another way you can go is to pay all mixed-use bills from your business and split the payment when you enter it on your books:
Check to Electric Company for $250 –
Debit Utility Expenses ……………………$125.00
Debit Personal (capital draw or loan) ……..$125.00
Credit bank account………………………………………….$250.00
Or you can pay it from the business and write a journal entry each month or at the end of the year to adjust out the personal portion of the expenses.
Another idea is to pay them from your personal account in full, then submit an expense report to your business for reimbursement. Include copies of the invoices. Your business will write one check to you each month for its share of the bills.
buy canadian lasix online cpff.ca/wp-content/languages/new/canadian/lasix.html no prescription
https://libaifoundation.org/wp-content/languages/new/vardenafil.html
See there are many ways to keep the business activities in it’s own account.
Just a thought. Naturally, if you do get audited, and they want to see all the bank accounts, be sure to identify all the funds coming from the business, so IRS doesn’t think it’s extra income. How to do that is described in Chapter 13 of Small Business Taxes Made Easy. This is often the heart of an audit.
And remember, you can find answers to all kinds of questions about IRS audits, and other tax issues, free. Where? Where else? At www.TaxMama.com.
[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.https://libaifoundation.org/wp-content/languages/new/orlistat.html
com link – it’s free!]
Please post all Comments and Replies in the new TaxQuips Forum
Pingback: TaxMama