Commingling Accounts: Keeping Business Accounts Separate from Personal Accounts

 

 

Commingling Accounts: Keeping Business Accounts Separate from Personal Accounts

By: Mike Ward EA, OC Tax LLC

 

As a seasoned Tax Professional at OC Tax Service in Berlin, MD I have had the opportunity to meet and work with many talented and driven small business owners.  New and experienced entrepreneurs alike make the common mistake of comingling there business and personal accounts thus leaving themselves vulnerable to costly legal and financial roadblocks. Piercing the “Corporate veil” is a legal concept used in law suits to access your personal assets. This happens when businesses and individual shareholders or company owners commingle funds and/or accounts.   Keeping accurate records and making sound financial choices when setting up your business structure can save many headaches.  These are the most common mistakes, and steps that can be taken to avoid future complications.

 

Common Mistake:

  • Using 1 bank account for personal and business activities
  • Paying personal expenses with a business credit card or writing checks for personal expenses from the business account.
  • Using personal accounts to pay business expenses
  • Depositing company funds into personal accounts
  • Mixing bank accounts with multiple businesses

Solutions:

  • Use a separate account for all business activities
  • Never pay personal bills with business accounts.
  • Keep accurate records of any business expenses paid with personal funds and issue corresponding reimbursement checks.
  • If you have multiple businesses keep accurate records and maintain separation on all activities.
  • Have a qualified professional help when structuring your financial workflow and account set up.

 

Setting up a company for accurate bookkeeping is a quintessential tool for the success of any size business. Small individually owned businesses struggle with allotting the proper time for administrative duties such as bookkeeping and tax preparation. OC Tax LLC has qualified professionals available for services ranging from basic consultation all the way to full service on site bookkeeping.  We can customize a Tax and Bookkeeping package that works best for your individual needs.

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OC Tax Service serves customers on Racetrack Rd.

By Kara Hallissey | Feb 23, 2017

Photo by: Kara HallisseyMike Ward and Mary Ann Jordan help clients with all tax service needs on Racetrack Road in Berlin with their OC Tax Service business.

(Feb. 24, 2017) OC Tax Service kicks off its first season on Racetrack Road after Mary Ann Jordan and her two sons Mike and John Ward have served the community since 2003.

“Most of our business is developed from word of mouth. Our clients are loyal,” Mary Ann Jordan said. “They keep coming back and refer people to us. We have great clients.”

All kinds of tax services are available for individuals, families, students, corporations and small businesses. There are two notaries on site in addition to payroll services and tax consultations offered.

“We care and pride ourselves in trustworthiness,” Jordan said. “Clients trust us and that is why we are so highly recommended. We try to always create a trustworthy environment.”

OC Tax Service has a state-of-the-art system for secure backup, which encourages clients to go paperless by offering PDF files and a free jump drive of their taxes. Hard copies are also available. Fast and no interest loans can be attained based on refunds.

“We are sensitive to the security of information we hold here,” Jordan said. “We are developing a system to help other companies backup their files securely.” The system is slated to be up and running by the spring.

Bookkeeping services include preparing income statements, balance sheets and financial reports for customers in addition to settling bank accounts and accounting books. There is no financial planning.

“We personalize to what a company’s needs are and explain what happens when money is taxed,” Jordan said. “Combined, we [Mary Ann and her two sons] have more than 25 years’ experience in preparing personal and business tax returns, primarily in Maryland and Delaware. We also have the capability for preparing taxes in all states.”

The tax business was located on Golf Course Road for 13 years before moving in October to Racetrack Road.

“We are constantly educating ourselves about the changes in the tax environment,” Jordan said. “Come in and talk to us. We can go over your needs and set up a plan with a free consultation.”

OC Tax Service, on Racetrack Road in Berlin, is open Monday through Friday from 9 a.m. to 6 p.m. and on Saturdays from 9 a.m. to 5 p.m. Call 410-973-2750 or 410-213-8344 to make an appointment after hours. Walk-ins are welcome.

Clients can also schedule online using a booking system at www.oceancitytaxservice.com.

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