Combining personal and business accounts is one of the most costly mistakes many new business owners make and it is a mistake that can cost thousands in tax penalties and professional fees, says Jamie Golombek, of the CIBC. A report focused on helping small business owners avoid key taxation mistakes indicates that while business owners may find it easier to deposit cheques to a personal bank account or to charge business expenses to a personal credit card, these decisions can put them at risk. He notes that sorting out what is a business expense and what is a personal expense at tax time can be tricky and individuals can inadvertently deduct an ineligible expense. Golombek recommends keeping personal and business expenses separate, keeping good records, and seeking expert advice.
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