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Income & Expenses
Question: If I, a sole proprietor, pay personal expenses out of my business bank account, should I count the money used as part of my income? Can I write these expenses off?
- You would include the money used to pay personal expenses in your business income when it was earned by your business.
- You would not write off these expenses because they are not ordinary and necessary costs of carrying on your trade or business.
- Personal, living, or family expenses which are not specifically provided by law are not deductible.
- It is recommended that you not mix business and personal accounts as this makes it easier to keep records.
Category: Small Business, Self Employed, Other Business
Subcategory: Income & Expenses