we're gonna be talking about something that's very exhilarating. Keeping personal expenses and business expenses separated. Oh, yes. Well, it's very important. I'm not sure I'll agree with exhilarating, but it's important. Well, it is important that you don't co-mingle expenses. We're gonna be talking about that. You're starting a new 1099 venture out there. You're not sure what all you need to be doing. Or if you've already got an established business and we're seeing that you're charging stuff to your personal card and you're co-mingling expenses. So we're gonna talk about today that. So one of the problems with that is it's very, very confusing. If you can imagine you're charging stuff to your personal card, you're running a business over here, you're having to reimburse yourself for what you charge on your personal card. There can be some problems with that from an accounting perspective and even a tax perspective. How do you keep track of all that? Very carefully. It's the problem. We've got one client who she had four different cards, one business card, three personal cards. And she was spending stuff on each one because she said, well, sometimes I don't carry the business card with me and I need to do something. So I go ahead and throw it on my personal card. And it made it a nightmare from an accounting perspective when it came time to do her taxes or to even let her know what that looked like in terms of balance sheet projections. And it can lead to tax problems. It's really not worth the risk. I mean, you can miscount your expenses and that's bad for you. If the IRS were to review that and see that you're coming in personal and business assets, they would probably have a problem with it as well. And then when you mix personal and business, you're also opening up your personal assets to liability if for some reason your business got sued. And then if you're not utilizing your business assets and the business, and you go to apply for a credit card or other things through the business credit, you buy a car, that can also limit your ability to get a loan or for your credit for the business. So a lot of reasons there. First and foremost is the IRS wants you to keep separate and distinct records for a business. If you do separate it, it gives you really a clear financial picture of where you stand. Especially at certain times of the year, you wanna know how much money you made. Working with an accountant. He wants to know how much money he's made or she. And they're gonna wanna track that to see, are you on track for paying your taxes this year? You might or might not be. But in order to project that, you've got to really have a clear financial picture. Second thing is organization. How many CRNAs like to walk into a room where the CRNA working there's got stuff everywhere, they don't have anything taped down. Cher, do you like that? No. No, no. And most CRNAs are pretty anal about that, I would say for the most part. But it used to be the old ad, as you see people walk in with a shoe box filled with receipts. You've seen that, I've seen that. People you cannot be organized if that's the way you're tracking your business expenses. And it also helps you make better decisions. And I referred to that a minute ago when I said, when you're sitting down with your account at your CPA, and you've got everything run through the business, you can really take a look at your financials and you can make informed decisions. Oh, well, it's the end of the year, it's October, I see I've made this amount of money. What can I do now to avoid, use that tax avoidance strategy that we talked about, avoid paying so much in taxes? What can I do legally to do that? Being able to make those decisions at the end of the year, because once the clock ticks over, there's not a lot you can do, go back and do deductions for the previous year other than retirement plan contributions. So having a clear picture helps you make better decisions about your business. And Sharon, there might be CRNAs out there rolling their eyes right now, because most times they're not making those decisions anyway, are they? Relying on someone else. I know Pierce does a lot of your stuff for you. He keeps you organized and he deals with the tax side of things, and he helps make those decisions. A lot of CRNAs rely on their accountants, their CPAs, to help make those decisions. And they've got to have accurate data in order to do that. So those are big deals. Consequences, one, the IRS could step in and you've definitely got some problems. Legal issues, we talked about a little bit, and then we talked about debt as well. Everything needs to be separated for these three reasons. We don't want to have tax issues, we don't want legal issues. And if we need to utilize debt, then we can do that and we can actually look at where everything lies throughout the year. So just kind of a summary slide there. So how do you do that? How do you keep it apart? We recommend, number one, you've got to have a separate business account. Okay, first thing we do, a new CRNA out there, they want to start doing 1099. One of the first things we have them do is to set up their operating business account. That's where everything will go into, and that's where everything will flow out of. And that's the way I explain it. Every paycheck you give will come out of this business account. Every bit of income that you make will go into this business account. Now, you say, well, what if somebody pays me directly instead of paying my business? That's wrong, it shouldn't happen. You're opening yourself up to liability, you're opening yourself up to confusion, and then we've got to somehow figure out how to bring it from personal back into business. Using a separate credit card, that's the second thing we do. Sharon, we're going to say, Sharon, you've got to get a business credit card, okay? Because there you go, that business credit card is going to be used for all business expenses, not some. Not I'm going to charge some to my personal Discover card, I'm going to charge it all to this business credit card. So between those two things, your business account and your credit card, all expenses should flow, okay? And then what we're able to do is we're able to track those expenses as they happen. Mistakes happen. If you're reconciling every month, you're looking at your credit card bill, you're looking at your bank account, or you're paying someone to do that, because a lot of CRNAs don't want to do that themselves, and that's fine, then they can actually reconcile those accounts from your bank statement and your credit card statement, and we know everything is right and correct, and it's just like walking into that room, Sharon, and everything is taped down nicely and organized, and everything is methodical, and you know that feeling it gives you? Yes, I do, and I know the feeling it gives me when it's not. Yes, and that's the feeling that your accountant, your CPA, and yourself will have if everything is organized and done right. So what tools do you use to do this? Well, there's a lot of accounting software out there that you can use. Most popular, QuickBooks and Xero. Both of them do a great job. They bring the data in. You can go in and categorize that data. There are some different things you need to do if you're taxed as an S-corp in QuickBooks. It gets a little bit more complicated than just going in and crediting, and your credits and debits, and then categorizing, but that's the software that most people use. And if you don't wanna do it yourself, you can have a consultant. You could possibly have somebody that helps you, a bookkeeper, an accountant on a monthly basis, somebody that can go in and take care of this for you. That way, everything runs smoothly, and at the end of the year, we're ready to go. So separating your business and personal expenses is a critical step, Sharon, in making sure you're running your business properly. I cannot tell you how many times I see CRNAs mess this one up. They all the time are charging things to their personal cards. They're pulling money out, using it personally. They should have been used business, a lot of things. Keeping a separate business account, credit card account, utilizing resources that are out there, and there are a lot of resources out there for you to do.

personal expenses

business expenses

separate finances

tax issues

financial management