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heppy-neural-net
October 15, 2024
Question

Handling Personal Expenses Charged to Corporate Card as Single-Member LLC

  • October 15, 2024
  • 2 replies
  • 0 views

 

I am the owner of a Single-Member LLC, and I accidentally used my business card to pay for personal expenses. Specifically, I used the corporate credit card for a $100 Uber trip, which was for personal use. Should I reimburse the company for this amount, or is it sufficient to categorize these expenses as “Personal Expenses” in QuickBooks?

 

Could you please provide step-by-step guidance on how to handle this situation correctly?

 

Thank you for your assistance.

2 replies

kabel1657
kabel1657
October 15, 2024

Hello @heppy-neural-net,

 

It’s a common mistake, no worries! Here's how to handle it:

 

  • Reimburse the business: Since you're a Single-Member LLC, it’s best to reimburse the $100 to your business account.
  • Record the transaction: In QuickBooks, categorize the Uber charge as "Personal Expenses" or "Owner’s Draw" to keep it separate from business expenses.
  • Document the reimbursement: Once you transfer the money back, record that transaction as a deposit and categorize it as "Owner’s Contribution."

 

This ensures your books stay clean and IRS-compliant. Always remember, personal expenses should stay personal!

Hope this helps!

 

P.S.: I’m a QuickBooks ProAdvisor with 7+ years of experience. Need help with QuickBooks Bookkeeping?

 

Google my username to see my proven track record!

K
KayePe
October 15, 2024

Yes, Jeremy, you can reimburse the company for that amount. Thank you for reaching out about the personal expenses charged to your business card. I’d love to expand on kabel1657's insights and guide you through the steps needed to achieve your goal.

 

I appreciate you providing a detailed response about Jeremy's concern, @kabel1657. Allow me to have additional information with handling personal expenses from a business credit card in QBO. 

 

 

Record a personal expense from a business account.

 

  1. Click the + New button.
  2. Choose Check or Expense.
  3. Select the payee and credit card you used in making the payment.
  4. Click the dropdown menu to pick the appropriate category.  Feel free to consult with your accountant in selecting the account.
  5. Enter the amount and hit Save and close.

 

 

After that, you can now reimburse the company.

 

  1. Click the + New button.
  2. Select Bank Deposit.
  3. Pick what account to add the reimbursement and set the correct date.
  4. From the Add funds to this deposit section, enter the person who made the personal expense in the Received from field.
  5. Select the appropriate category.
  6. Decide the Payment method and have the reimbursement amount.
  7. Once done, hit Save and close.

 

 

Meanwhile, it's a good idea to reconcile your accounts in QBO to make sure they align perfectly with your actual bank accounts. I'm also adding this guide to learn how to handle personal and business expenses: Mixing business and personal funds in QuickBooks Online.

 

Remember, I’m just a message away if you need any help. Feel free to drop a comment below, and I'll respond as soon as I can. Enjoy the rest of your day.

    H
    heppy-neural-netAuthor
    October 15, 2024

    I used my business credit card for a personal $100 Uber trip. In QuickBooks, I followed the steps to record the personal expense and then entered the reimbursement as a Bank Deposit. For the Account field, I selected my business checking account. Is this correct, or should I have selected something else?

     

    What’s the next step to ensure everything is recorded properly?

    Rainflurry
    Rainflurry
    October 15, 2024

    @heppy-neural-net 

     

    If you haven't paid the cc balance already, the easiest and cleanest way to handle this is to pay the $100 charge on your cc from your personal account and leave the transaction out of your company books - no recording and no reimbursement required.  Exclude the Uber transaction from your bank feed if you haven't already or delete it if you added it and haven't paid the balance.  If you paid the cc balance out of the business account, then you should follow the advice provided by @kabel1657.      

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