Flag Potential Personal Expenses
Personal expenses mixed into your business account can reduce your deductible business expenses and create tax complications. This recipe walks you through identifying and removing personal charges to ensure your books accurately reflect only legitimate business deductions.
1. Ask Judy to look for personal charges
Start by having Judy scan your business account transactions for any that appear to be personal expenses rather than business costs. This automated review helps catch common mistakes like personal groceries, subscriptions, or transfers that may have been processed through your business account.
2. Review and remove them
Go through Judy's findings and mark each personal transaction accordingly. Removing these from your business expenses ensures your tax records are accurate and prevents you from claiming non-deductible personal spending.
3. Confirm your books are clean
Do a final verification by asking Judy to check for any remaining questionable transactions you might have missed. This last pass ensures your business account only contains legitimate deductible expenses.