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newtothis2020
August 20, 2020
Question

Owner's Equity Question

  • August 20, 2020
  • 1 reply
  • 0 views

My husband and brother have started a business and the partnership is 50/50. We have invested personal funds into the business through paying for items from our personal bank account. I have recorded these transactions through a sub account of Owner's Equity called Owner's Capital.

How do I record the business paying us back for our invested personal funds? Does he have to pay income tax on this?

If we choose to take money out of the business account that is like wages, so not to pay us back for our investment, how do I record that? This I understand we will need to pay tax and potentially CPP on.

Thanks!

1 reply

PatriciaT
PatriciaT
August 20, 2020

Hi newtothis2020,

 

Thanks for reaching out! Having your transactions properly recorded is essential in the running of your business. Even though it's not recommended to mix personal and business funds, I know it can sometimes happen. I'll show you how to handle this in your account.

 

QuickBooks Online is all about organizing your books. When it comes to managing personal and business funds, there are few articles that can easily guide you to make sure everything is lining up correctly. Check them out below.

In terms of tax implications, your provincial tax agency and your accountant are incredible resources if you'd like more information on how these should be recorded. In case you don't have an accountant, you can find one on our Find-a-ProAdvisor website

 

I hope this helps! Have a nice day.

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