Many small business owners start their companies without knowing how they are supposed to be paying themselves. The IRS has strict rules on this.

• Sole Proprietor - Cannot be on payroll. Must take funds as owner's draw
• S-Corp - Must be on payroll. At least 51% of your income must come from payroll while 49% can be taken as distributions.
• Partnership - Cannot be on payroll. When the partnership is formed guaranteed payments to each partner needs to be spelled out in the partnership agreement.
• C-Corp - Must be on payroll

I cannot count the number of times I have asked a business owner what tax entity they are and they reply with LLC.

• LLC is only at state level. It does not specify what tax form you file with the IRS.
• Every business owner should know their tax entity, Sole Proprietor, Partnership, S-Corp or C-Corp

Comingling! This means that you comingle money either between yourself and your business or between businesses. This is a no-no! 

• Your business money should not be treated as your money! While you own the business, the business, not you, owns the money. 
• If you need money from the business, you either write yourself a paycheck, take a distribution or take a loan from the business. If you take a loan from your business you must have a loan agreement with terms for paying the loan back.
• If you accidentally use the business credit card for something personal, you would categorize the transaction as either Owner's Draw, Distributions, etc.
• If you are an S-Corp or C-Corp, comingling money pierces the corporate seal and leaves you open to legal action.

Loans to and from the business.

You may run into times when you need to lend your business money from your personal account. There could also be times when you need to borrow money from your business. 

In either scenario, you need to have a written loan between you and your business. You must have a fair interest rate and repayment terms.

When you are new in business it can be very difficult to obtain credit cards.  

Many small business owners use their personal cards. This is fine, but you do not connect your personal credit card to your business account. You keep the receipts for anything purchased for the business and reimburse yourself for those costs. Then, you pay the credit card, not the business.