Separating Your Business Money From Personal Funds

MaertinK.
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Separating your business money from personal funds is essential for financial clarity and legal compliance. Here are practical steps to achieve this:

  1. Apply for an Employer Identification Number (EIN): Obtain a unique nine-digit EIN from the IRS. It serves as your business’s identifier and helps separate it from your personal affairs .

  2. Establish Your Business Entity Type: Form an LLC or corporation (if applicable). This legally separates your business from you as an individual.

  3. Open a Business Bank Account: Set up a dedicated business checking or savings account. Use it exclusively for business transactions, such as paying bills, collecting payments, and managing expenses

  4. Get a Business Credit Card: Having a separate business credit card simplifies tracking expenses and builds business credit

  5. Pay Yourself a Salary: Regularly transfer a fixed salary from your business account to your personal account. This helps maintain clear boundaries

  6. Separate Receipts: Keep business-related receipts separate from personal ones. Use digital tools or physical folders to organize them

  7. Track Shared Expenses: If you occasionally use personal items for business purposes (e.g., your phone), document these transactions

  8. Educate Others: Ensure employees and partners understand the importance of keeping business and personal finances separate

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MaertinK.

admin@nestict.com
https://www.keemstar.co.ke
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MaertinK.

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