I'm 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 wouldn't write off these expenses as business expenses because they're not ordinary and necessary costs of carrying on your trade or business.
- Personal, living, or family expenses are generally not deductible.
- It's a good idea to keep separate business and personal accounts as this makes it easier to keep records.