Kathleen Bell <orbellfamily[at]comcast.net> wrote:
- quote -

My approach is I keep a record of any business expense,
whether it be paid by check, credit card, or cash. If no
record of this sort exists, then it was not a business
expense.

I then at tax time take these records (I've created a form
for this purpose) and "code" them -- i.e., determine which
line of Schedule C they go on.

Dunno if this is sufficient; I have not had my business
audited, but at least I'd have some paperwork backing it up.

Steve

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"Steve Pope" <spope33[at]speedymail.org> wrote:
- quote -

There is also a practical problem. If you pay a bill,
say,to the power company, when you get to recording, it can
you get confused as to whether it is for your home or your
office? If you are completely organized at all times, it
may not be a problem, but around March 30 things may get
half done to be completed later. When everything is caught
up, it takes a little more to strighten it all out.

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Joe Btfsplk <taxxcpa[at]sbcglobal.net> wrote:
- quote -

I agree.

- quote -

I find this discussion interesting. I operate a sole
proprietorship, as does my wife, and neither of us has a
business checking account. I do not see how this means that
business and personal funds are being "comingled".
Business revenues and expenses are recorded as they occur.
We've been doing it this way in excess of ten years.

I don't even see where there are "funds" associated with
operating either business. Can someone define what
"business funds" means with respect to a sole proprietor?

Steve

Moderator:
Sole Proprietors may comingle without fear of the IRS.
But it is still frowned upon.

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Since a business credit card that includes charges for
anything personal, ALL interest on balances over 30 days
immediately becomes personal interest and no longer
deductible as a business expense, so its better to not to
comingle those charges either. Denise

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- quote -

A somewhat related question.... A Sole Prop keeps their
business checking account separate from their personal
checking account. However, Sole Prop. has a credit card in
the business name where mainly business purchases are made,
but sometime personal purchases are made. The personal
purchases are recorded as a draw. Are there any problems
with this?

Thanks.

Josh

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Joe Btfsplk <taxxcpa[at]sbcglobal.net> wrote:

- quote -

For a sole proprietor, what is the difference?

Seth

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"Mark H" <gcollect1[at]sbcglobal.net> wrote:
- quote -

I commingle my personal and business checking account. When
I enter them on my books I distinguish the personal expenses
by recording them as personal withdrawals.

There is no need for separate accounts if you keep adequate
records.

I also work at home. I record my utility bills and other
expenses allocable to the home office in separate accounts
and take the portion attributable to my office on my tax
return along with the concomittant depreciation.

Moderator:
The IRS has taken the position that business funds
commingled with personal funds is personal income.

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"TaxProblems" <beauchamp.jim[at]gmail.com> wrote:

- quote -

you should definitely maintain a separate checking account
for business purposes rather than comingling your business
receipts and disbursements with your personal. it's a
simple matter to issue a check to yourself on a schedule or
as needed to fund your personal account, however, having
business and personal accounts comingled is asking for
trouble.

- quote -

Lots of rules about deductibility of meals. Were these meals
w/ clients discussing business? Do you have receipts? Were
you traveling away from home (defined as overnight) for
business purposes? No? Then you'll be hard-pressed to
justify as a business expense.

I'm a honest guy, never been audited, just looking for ways
to cut down my taxes since I've only been able to pay about
15% of the total value of taxes owed.

Regards,
Jim

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"TaxProblems" <beauchamp.jim[at]gmail.com> wrote:

- quote -

What I understand is that you're not treating taxes as a
necessary expense the same way you treat mortgage payments
and utilities. THAT's what you need to address, not some
way to trump up deductions. (No, you can't deduct meals
because you work at home.)

--
Phil Marti
Clarksburg, MD

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I've been self-employed since 1998. I just use social
security id when paying quarterly taxes. Since I got
married, I've not been able to keep up on quarterly tax
payments (you understand).

Basically, I work from home. One room in our home is
dedicated to my home office (10%) of the total square
footage of our home. I've used H&R block since 1998 and the
guy seems to get me all the right deductions (mortgage,
office supplies, computers, gas, electric, etc)

My wife works about 100 hours a year for me doing the books
etc. I don't pay her since all my checks go into our
personal checking account (clients just make out checks to
me).

Since we file jointly and just itemize deductions out on a
schedule C, are there any other things I can deduct. I saw
a schedule somewhere on the Internet about the federal
government allowing people to deduct like $1.00 for
breakfast, $1.25 for lunch and a $1.50 for dinner. Would
that apply to me since I'm home and working all the time?
All my clients are outside my state?

I'm a honest guy, never been audited, just looking for ways
to cut down my taxes since I've only been able to pay about
15% of the total value of taxes owed.

Regards,

Jim

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