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Income & Expenses
Question: I am a sole proprietor and pay personal expenses out of my business bank account. Should I include the money used for personal expenses as part of my business income? Can I write these expenses off?
- You would include the money used to pay personal expenses in your business income when your business earned it.
- You would not write off these expenses as business expenses because they are not ordinary and necessary costs of carrying on your trade or business.
- Personal, living or family expenses are generally not deductible.
- It is a good idea to keep separate business and personal accounts as this makes it easier to keep records.
Category: Small Business, Self-Employed, Other Business
Subcategory: Income & Expenses