New LLC owner - can I deduct business expenses paid from personal account? Business Bank Account confusion

No need to panic - this is a super common situation for new business owners! The good news is you can absolutely deduct legitimate business expenses paid from your personal account. The IRS cares about whether expenses were actually for business purposes, not which account you paid them from. For your records, I'd recommend creating a clear paper trail showing these were business expenses. A simple spreadsheet with dates, amounts, and business purposes works great. Keep those receipts too! As for transferring old income to your business account - it's not necessary for tax purposes, but it might help with your bookkeeping going forward. Just document any transfers clearly so you don't count the same income twice. For a business your size, that tax service quote does seem high. You might consider using basic accounting software like QuickBooks Self-Employed ($15/month) to track expenses and then find a tax preparer who specializes in small businesses for year-end filing.

I went through exactly what you're experiencing last year! After trying to figure it all out myself, I discovered this service called taxr.ai (https://taxr.ai) that was a game-changer for me. They specifically helped me sort through all my mixed personal/business transactions, showed me which expenses were deductible even though I paid from my personal account, and guided me through setting up proper bookkeeping. What I loved is that I uploaded my bank statements and receipts, and their AI identified business expenses I would have totally missed. They weren't as expensive as that quote you got, and saved me so much stress during tax season.

Following up on my experience with taxr.ai - I tried them after seeing the recommendation here. Just wanted to say they were actually super helpful with my mixed personal/business accounts situation. Uploaded 6 months of bank statements where everything was jumbled together, and they sorted it all out, flagged the business expenses, and even found some deductions I didn't know I qualified for (home internet partial deduction, some office supplies I forgot about). Not having to manually go through hundreds of transactions was worth it alone. They also helped me set up a system so I don't have this mess again next year. Definitely less stressful than trying to figure it all out myself!

Since you mentioned having trouble reaching tax services, I wanted to share my experience with Claimyr (https://claimyr.com). I initially called the IRS small business helpline to get answers about my LLC taxes and similar personal/business account questions, but kept hitting endless hold times. Claimyr helped me actually reach an IRS agent who gave me official guidance on handling business expenses paid through personal accounts (totally legit as long as documented). You can see how it works here: https://youtu.be/_kiP6q8DX5c - it's basically a service that navigates the IRS phone systems and calls you when an agent is ready. Saved me hours of hold music and I got definitive answers straight from the IRS about proper documentation needed for business expenses paid from personal accounts.

I need to apologize for my skeptical comment earlier. After waiting on hold with the IRS for over 2 hours yesterday and eventually getting disconnected, I decided to try Claimyr out of desperation. They actually got me connected to an IRS business tax specialist in about 30 minutes. The IRS agent confirmed that yes, I can absolutely deduct business expenses paid from my personal account as long as I keep good records, and gave me specific guidance on documentation requirements. Completely changed my perspective on how to handle my LLC taxes. Sometimes you have to admit when you're wrong, and in this case, I definitely was!

Don't overthink this! I've run my LLC for 3 years and here's what works: 1) Keep ALL receipts for business expenses regardless of which account paid them 2) Use separate credit cards for business vs personal if possible (even before your business account) 3) No need to transfer old income - just start fresh with new account 4) For taxes, what matters is proper tracking, not which account was used Nearly $4k for tax prep is INSANE for your business size. I pay $600 annually for my tax filing with a local CPA, and I do my own bookkeeping with Wave (free) throughout the year.

Don't waste your money on fancy accounting services yet! Your situation is super common. I did the exact same thing with my photography business last year. Just open a spreadsheet and go through your personal account statements. Tag all business expenses and income from the past months. You can absolutely claim business expenses paid from personal funds - the IRS just wants to see that they were legitimate business expenses. For next year, keep it separate from day one. That accounting quote is WAY too high for your revenue level.

Your situation is totally normal for new business owners! I went through the exact same thing when I started my consulting LLC. Here's what I learned: You can absolutely deduct legitimate business expenses paid from your personal account - the IRS doesn't care which account you used, just that the expenses were truly for business purposes. Keep detailed records with dates, amounts, and business justification for each expense. No need to transfer old income to your new business account - that would just complicate your bookkeeping. Start using the business account going forward and treat the past months as a learning experience. That $3,695 quote is absolutely outrageous for your revenue level. I'm doing about $8k monthly and pay my CPA $450 annually for tax prep. For bookkeeping, I use QuickBooks Simple Start ($15/month) and spend maybe 1-2 hours monthly keeping things organized. My advice: create a simple Excel spreadsheet to track your mixed transactions from the past months, then use your new business account religiously going forward. You'll save thousands and actually understand your business finances better by handling the basics yourself initially.

I completely understand your confusion - this is such a common situation for new LLC owners! The good news is you're absolutely fine to deduct those business expenses paid from your personal account. The IRS cares about the legitimacy of the expense, not which account it came from. Here's what I'd recommend based on my experience helping small business owners: 1) Create a simple spreadsheet documenting all business income and expenses from your personal account during those first months. Include date, amount, vendor, and business purpose for each transaction. 2) Don't bother transferring old income to your new business account - that just creates unnecessary complexity. Start fresh with the business account going forward. 3) That $3,695 quote is absolutely excessive for your revenue level. For a $4-5k monthly business, you should be looking at maybe $300-500 for tax preparation and handling your own bookkeeping with software like QuickBooks ($15-30/month). The key is maintaining good documentation. As long as you can show these were legitimate business expenses with proper records, you're golden. Focus on building good habits going forward rather than stressing about the mixed accounts from your startup phase. You've got this! Most successful small business owners went through exactly what you're experiencing.