No matter how micro your micro business is, you MUST keep your business and personal checking and credit cards separate.
When you use a business account to pay for personal expenses (or vice versa), you “pierce the corporate veil.” Ouch. It sounds painful, and it really is. What does this mean?
When you, for example, pay for your gym membership with your business card you are telling the IRS that you don’t know the difference between a personal expense and a business expense. That means that you are opening yourself up to have your personal finances scrutinized as a part of an audit or bankruptcy. It also means that any protections you might otherwise enjoy from having your business within an LLC is eliminated. Basically, you can’t have your cake (protection of your personal assets from legal or IRS judgements) and eat it too (mixing of personal and business banking).
When I get all over my clients about this, I always ask, “would you rather that I harass you about this or the IRS?” Doesn’t that say it all?
Separate yourself from your business banking. You will never regret that decision.