Start Up
(Missouri)
You have to use your money to start your business. Is it wise to put your money in your business bank account when you first open it and then proceed to purchase things for your business out of that account to be able to track everything accurately for taxes and other breaks?
Answer
Absolutely!
You do NOT want to put your startup business expenses on a personal credit card. That would technically be commingling of funds (though, in reality, it takes a lot to pierce the corporate veil, so don't lose too much sleep over it).
It's bad business practice to mix your personal and business funds. Even if a judge wouldn't pierce your veil for mere sloppy business practice (though you're rolling the dice, because you never know what kind of judge you'll get), why be sloppy?
You can pay for the initial LLC formation with personal funds, as the company does not yet exist. Those expenses can be considered a capital contribution to the LLC.
After formation, and you have an EIN, go directly to the bank and open up a business checking account. You'll need the EIN because banks won't open an account without one.
All of your business expenses must be written out of your business checking account.
If you need a credit card for your business, then apply for a business credit card. Trust me, you'll start getting offers in the mail very quickly after forming your LLC--particularly if you use your home address as your registered agent.
Will your business need a Paypal account? Then get one in your business' name, using your business EIN.
Finally, buy a copy of Quickbooks and use it to track your business expenses.
If you have employees, you absolutely need to use a payroll service. Do not attempt payroll on your own...trying to do your own payroll is like trying to do your own laser eye surgery.
As owner, you are personally liable for all payroll taxes that you fail to pay. These debts are difficult to discharge in bankruptcy and the IRS can follow you around for a long time, racking up penalties and interest.
