Small Business Expenses Canada
May 15th, 2007
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Question: Personal expense through corporate account?
Hi, I have a small company, so I have a business bank account. I am located in the province of Quebec, Canada and my company is Incorporated. Now, I pay some of my contractors through paypal which is linked to my business bank account. At some point, I used my Paypal for personal uses since this one is ALSO link to my personal credit card. My mistake here is that not having funds in my business account would oblige Paypal to pay themselves with my credit card. Now the problem, that I had no idea this would cause my business account to overdraft and cause NSF fees. I paid back all the money to the bank as soon as I realised, but how do I explain this in my bookkeeping and tax?
Please anyone could you answer my question or direct me to a link?
I am asking the question again.
Answer: 1. Write a check to the business account for the amount of the transaction plus the amount of the NSF fees.
2. If don't have an account in your books for such goofs, create one and use it to account for this depost so that it bears no tax advantage nor tax disadvantage.
3. Acquire a new credit card for the business, set up a new PayPal account (linked to the new card) for the business, and de-link the business from your personal PayPal account.
4. Vow to never again mix business and personal funds.
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