How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lev Your Own Question
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

Hi There! As a disregarded entity, I am just now starting up

This answer was rated:

Hi There! As a disregarded entity, I am just now starting up my business. I just opened a business account and understand that I should not co-mingle business vs personal expenses. However, I do not have any starter checks and need to pay myself out. Can I use my business debit card to purchase a money order made payable to me? Or should I sign up for a payroll service that deducts tax withholding versus the money order option?

Lev :

Hi and welcome to our site!
There is NO payroll for a disregarded entity. You may use the payroll service to pay other employees if you have any - but not to pay yourself.
You may simply set a payment via bill payment option - and the bank will send a check to your personal name.
Please be aware that it is recommended not co-mingle business vs personal expenses - but that is NOT required.
If you clear separate business and personal expenses - that will be for your benefits. For instance - if there are any charges related to your business account - these charges are deductible as business expenses. However - if the same account is used for business and personal transactions - some account related expenses might be considered as personal and not deductible.
However - if you will use a business debit card to pay your personal expenses - that is not prohibited - and you are allowed to do that.

Customer:

Thank you for your response. My bank does not offer bill pay at this time. What are my other options besides waiting for starter checks to pay myself out?

Lev :

Again - you may use your business account as you want - there is NO limitations set in the law. You may perfectly use it to pay your personal expenses.
It is RECOMMENDED to keep your personal and business accounts separate - but not required.
Another option - you may simply take a cash out of your business account - and deposit it into your personal account.

Customer:

Okay, thanks for the information. I will utilize that option instead. I really do not want to mix personal and business as it will be an accounting nightmare. Thanks again!

Lev and other Tax Specialists are ready to help you
If both - personal and business accounts are in the same bank - you would do that transfer at the same time without taking actual cash out from the bank.
You will prepare two slips - for withdrawal and for deposit - and both translations will be completed at the same time.
Some banks allow to transfer funds between accounts - so you might be able to transfer the money from your business to personal account online. Please verify if your bank allows such transfers.

Related Tax Questions