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Question added to topic MoneyJune 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.
Pam Newman is a Certified Management Accountant, author and Certified QuickBooks ProAdvisor for Financial and Point-of-Sale software. She is also president of RPPC, Inc., which provides customized business development services.

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