spouse sole proprietor llc and business expenses

[tnoskilz]

ok, so my wife is getting her general contractors license and we're forming a llc with her as the sole member to keep things simple. 

so far we've always filed taxes as married+jointly, with most of this time being me as the sole income.  The plan is to establish separate business accounts and try to have most purchases use accounts in her name until then. 

I'm curious about if there are any issues with claiming business expenses for purchases made using accounts in my name.
examples: 
A hardware store credit account that already exists in my name.
The amazon prime account we have is in my name, though payment method can be hers, mine, gift cards, etc...

so tools or supplies purchased for her business using an account in my name, still safely deductible?

[Alternatepriorities]

I'm no accountant... I do have and LLC and I tend to take the perceived path of least audit risk. I would not risk that. I'd either put your name on the business or have her open her own cards.

But as I said I'm not accountant so hopefully one of them will chime in and I can learn more about this.

[Michael in ABQ]

It will make your life much easier if business and personal accounts are kept separate. Get a business bank account and business credit/debit card and run everything related to the business through those accounts. If you transfer money to or from your personal account, it should be infrequent - not dozens of transactions per month. It's either an owner's distribution (i.e. profit from the business) or it's an owner's contribution (i.e. providing initial funding for the business to get started).

Ultimately every time you use a personal account to buy something for the business the business should reimburse you. That gets very messy if you're talking about $50 for a toner cartridge here, or $20 for some supplies at Home Depot.

Don't worry so much about audit risk as simply being able to keep track of if the business is profitable. When you comingle personal and business expenses it makes that much harder to figure out. It also makes tax preparation much harder each year.

[Alternatepriorities]

That's an excellent point Michael in ABQ. I wasn't even thinking about the need to keep LLC money separate from personal to maintain the separate entity status.

OP as I recall mingling personal and LLC money essentially destroys the safety of the LLC and makes it easy to argue that it was really a sole proprietorship all along.

[tnoskilz]

That's pretty much what I was thinking.
You putting the expenses in context of re-imbursement helped me wrap my head around it a bit better.

Thanks!

[Reynold]

That's an excellent point Michael in ABQ. I wasn't even thinking about the need to keep LLC money separate from personal to maintain the separate entity status.

OP as I recall mingling personal and LLC money essentially destroys the safety of the LLC and makes it easy to argue that it was really a sole proprietorship all along.

Not only is that mingling a great way to destroy the safety of the LLC, it makes doing the taxes a major pain because your Balance Sheet won't balance if you have "expenses" for the business that don't show up in the business account.