If you run a business, don’t commingle funds! Don’t use business funds to pay for your personal expenses. You could be found liable for legal violations & breach of fiduciary duty. Even if you operate a sole proprietorship, follow this tip! This will help with preparing tax returns.
What Is Commingling Funds?
Commingling involves mixing personal & business money. Usually because you only have one bank account account. Also when you use business funds to pay personal expenses. If there is a corporate structure shielding you from personal liability, commingling funds will destroy your personal liability protection. Commingled personal funds with business assets will “pierce the corporate veil.” You can then be held personally liable!
Keep Separate Accounts!
Personal expenses should be paid from the personal account, & business expenses should be paid from the business account.
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