Business account used for personal (groceries) one time...

[chris_random]

Hello,

I have a quick question about the thread title...

Here it is. I have a business account with X amount of dollars in it. I went to the store, left my personal debit card at home on accident and paid
$250 for groceries with my business debit card. I can replace the money, but do I need to fill out any paperwork in order to maintain the separation
between business and personal uses? This is the first and only time I plan to use it this way. So far I have only used my business account on business expenses. I just want to make sure that I will be able to still write the business purchases off during tax season.

Thank you for reading.

Chris

[vangogh]

What kind of entity is your business? If you're a sole proprietor it really doesn't make a difference, since you and the business are essentially one and the same. If your business is set up as any kind of corporation then I'm sure there's some kind of paperwork to fill out.

I don't think this will affect your deductions at tax time. Naturally this expense wouldn't be a deduction for the business. If you are a corporation you do want to be careful though especially in regards to personal expenses. I realize this was a one time thing, but if it does happen a second and third time and so on, it could be argued you and your business are the same and I think you can lose some of the liability protection a corporation gives you.

Again, though it you are set up as sole proprietor, it really doesn't make a difference, though even then you're better off keeping the two accounts separate.

[Paul]

If you really need to keep your books crispy clean then book the 250 as a short term loan to yourself and then reimburse the company. They will offset.

[Business Attorney]

While it's certainly a good idea to keep your business finances and personal finances separate, mixing the two doesn't cause a legitimate business deduction to be disallowed. It may cause greater scrutiny if you're ever audited, but either the business expense is a legitimate deduction or it isn't. It has nothing to do with buying some groceries on the business debit card.

On the other hand, if you have a separate business entity such as a limited liability company or a corporation, co-mingling the funds can be a factor in a piercing the corporate veil argument. Even then, a single use of the business' debit card for a personal expense is unlikely to be considered significant.

I would simply repay the money as soon as possible to the business. Even in this day and age when everything is electronic, I still prefer that the transaction be documented with a personal check deposited into the business bank account. Most bank statements I've seen don't adequately show the source and destination when a transfer is made between two related accounts. You just end up with two statements that happened to have corresponding entries for $250 but no solid evidence that they are two sides of the same transaction.

[chris_random]

Thank you guys. I will draft a check from my personal account tomorrow and deposit it into my business account. I appreciate the time and
education.

Chris