As accountants, we often work with small business owners who face a barrage of challenges. For example, as a small business owner, it can be difficult to keep your personal and business expenses separate. So many business owners use personal credit cards for business expenses. As trusted advisers, we continually advise our clients against mixing their business and personal accounts. As referenced in this Fox Business article, it can be a bookkeeping nightmare, not only for the owner, but for the accountant as well. Upon reviewing the records, it is hard to determine which expenses are business and which are personal, and to provide proper support for the deduction. Additionally, credit card companies can take adverse action against cardholders who use personal accounts for business services.
In the end, the owner always feels like they missed something, and the accountant always feels like the included something they shouldn’t have. Please trust your accountant and get two separate credit card accounts!
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