Expert: Ed McFarland - 3/9/2005

Question
Good day!
I have a short question on taxes.
Recently started a small business a few months ago.
It is registered as an LLC and it is a single member LLC .  My business has just brought in about $1200.00 since the inception and about $5000.00 in expenses.
The problem is that I have been using my personal account instead of my business account to pay my bills.
Can you tell me how do I account for these expenses on my balance sheet and on my tax returns. Is there any way to account for them? Or since I was using my personal account for business expenses there is no way they can be classed as business expenses.

Answer
Use either an excel spreadsheet or paper and create the accounts. If you have the receipts for the expenses and copies of the checks for the revenue, you should be able to report the business for tax purposes.

Start keeping your personal stuff separate. Get a credit card and bank account and if this is a serious enterprise invest in Quickbooks or similar small business software. It's worth it.

Good luck.