Question added to topic Money • June 19, 2007
If you have started a new small business, how can you start paying yourself to pay your personal bills?
My wife and I worked for a Christian bookstore for 10 years. The owner retired, so we opened our own. The money that goes into the business account--can it be used to pay personal bills?
No--do not pay your personal bills out of the business account. Hopefully you have created a business plan. You need to assess what the business can afford to pay you and you should visit with your personal accountant regarding this as well. Normally we will take a portion of our payment as payroll expense and the other as an equity withdrawal - they are taxed differently. Then from this payment you will pay your personal bills out of your personal account. Do not comingle funds - keep business and personal separate.