Is transferring $ considered taxable income?
We have a credit line for the business, we typically use that and then we get to deduct the interest. However the rates are increasing so we wanted to know your thoughts on this:
If we transfer $ from a personal savings to the biz at the beginning of a month, as an example and then pay it back at the end of the month, is it considered taxable income when we return it to the personal account? We are sole proprietors. Just exploring other options than credit cards or credit lines and loans. Appreciate any feedback!
When you transfer money to your business that you plan to pay back that should be set up on the business books as a loan. So for accounting purposes, your business cash account would increase and then you would set up a liability account for the loan payable. When you pay the loan back to yourself, it is not considered income. Just write the check out of the business checking account and reduce the loan payable account.
All the Best-
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