How do I separate personal expenses from business expenses?

min read
Opinions expressed by Entrepreneur contributors are their own.
Start off with two separate bank accounts. For personal assets and resources that you use for business, you will need to track the portion that applies for business. For example, any additional costs incurred on your phone that are business-related as well as miles driven on the vehicle can be accounted for as legitimate business expenses.

The value of the business assets and resources that you use personally would be considered as personal draws from the business. As much as possible, you want to create a separation between the two entities to minimize the IRS disallowing writeoffs due to poor documentation. Document everything for back up with specifics. I would visit with your personal tax accountant for specific details to protect yourself.

More from Entrepreneur

Get heaping discounts to books you love delivered straight to your inbox. We’ll feature a different book each week and share exclusive deals you won’t find anywhere else.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Starting, buying, or growing your small business shouldn’t be hard. Guidant Financial works to make financing easy for current and aspiring small business owners by providing custom funding solutions, financing education, and more.

Latest on Entrepreneur