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What is the law that governs seperation of business and personal? For example if a person uses their business check book to cover not only the business expenses, but also their personal expenses such as mortgage, groceries, childrens clothes, childrens education, leisure items ect., and does that then infact make the gross income of the company your personal gross income? If I have a business and only use 1 checking account for all expenses in life, does that business gross amount also count as my personal gross amount?

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Marinette, Wisconsin

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I know that there is a law that once you use business accounts for personal they become one in the same. I have also heard this on several of the cout tv shows. I just need to know the law on this. Thank you.

Customer (name blocked for privacy)

Status: Closed Value: $15

Dear Customer (name blocked for privacy) -

The gross income of the business will include the receipts of the business, sales, fees, etc. It will not include deposits of loans from the owner or a financial institution. It also will not include paychecks from other jobs where you are considered an employee.

Likewise, you are only allowed to deduct the actual expenses of the business not repayments of loans or payments of personal expenses groceries, clothing, etc.

You may be allowed to deduct a percentage of the expenses of your residence if you operate your business out of your home. These expenses would include mortgage interest, real estate taxes, utilities and general repairs and maintenance to the property.

Hope this helps.

Steve

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Reply to Steve's Post: My question is if you use only the one account to cover all your expenses both personal and business does the gross amount of business then also become personal as well, and is there a law for that? for example:

Business makes: $100,000.00,from that account I pay all bills, personal and business, buy grocery, clothes, child schooling, should that amount then be considered my gross or net amount should someone try to take me to court?

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