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sandman21
August 16, 2022
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Categorizing business profit bank transfers: Self-employed

  • August 16, 2022
  • 1 reply
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I am a one person self-employed business. How do I categorize when I take profits? Mainly as a bank transfer between my business general operations bank account to my personal checking account to pay my monthly personal expenses like mortgage, utilities, etc. I want to make sure that this is not being counted as an expense or negative income. Thanks.

Best answer by Rustler

When you take money or value from the business for personal use as a sole proprietor, that is an equity draw.  Use that account as the expense (reason) for the payment/withdrawal.

1 reply

Rustler
RustlerAnswer
August 16, 2022

When you take money or value from the business for personal use as a sole proprietor, that is an equity draw.  Use that account as the expense (reason) for the payment/withdrawal.

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    sandman21Author
    August 17, 2022

    Thank you! For description then I have been writing: "Equity income transfer to owner personal account". Something like that sufficient? Also, do I list myself by individual name as payee or leave that blank?

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