The Real Cost of Mixing Business and Personal Accounts

You’ve heard it before: keep your business and personal finances separate. But when you don’t, it’s not just messy—it’s dangerous. Especially if the IRS comes knocking.

What Happens When You Mix Accounts

• Blurred financials = more IRS scrutiny

• Makes it harder to prove deductible expenses

• Can disqualify you from reasonable cause claims due to “negligence”

• Adds hours of cleanup (and dollars in fees) during tax resolution

Audit Risk Skyrockets

If your bank records show transfers, mixed charges, and co-mingled income, the IRS may:

• Reclassify income as personal

• Deny legitimate expenses

• Trigger a deeper audit or fraud review

What You Should Do Instead

• Open a separate business checking account immediately

• Use one debit/credit card for all business expenses

• Keep a digital bookkeeping system with clean categories

• Set up automatic transfer rules if you need to pay yourself

Call to Action

Still operating from one account? It’s not too late. Join Numbers from Scratch to build a cleaner financial foundation before year-end.