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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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Hi There! As a disregarded entity, I am just now starting up

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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.


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.


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.

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