Tips for using business money for your personal needs

As a business owner, you have the ability to take business funds and use them as you see fit. As long as all stakeholders are aware and agree, this is not a problem. However issues can arise if caution is not taken to ensure the right steps are followed. Remember that the ATO doesn’t allow free rides. Someone, somewhere has to pay tax on the money. Here are 3 tips to help keep you in compliance.

1. Always document your withdrawal
   Types of withdrawal can include salary, fringe benefits, dividends, trust distributions or loans. All can be accounted for in bookkeeping software and should be entered as the correct type of withdrawal.

2. Be aware of any tax implications
   If you withdraw money for personal expenses, you will need to either add it to your balance sheet as a loan which should be repaid, or withdraw it as salary and pay personal income tax on it.

3. Ensure all stakeholders are informed
   If there are multiple beneficiaries or shareholders, especially if they are not closely involved with running the business, you have a duty to keep them informed of any personal withdrawals. After all, it’s their money too. 

If you need advice or assistance with your personal expenses, get in touch today, and follow us for more tips.

Disclaimer

This information is intended to be general in nature and is not personal financial advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided in relation to your own circumstances.