0

I just started an LLC for a small engineering/prototype machining business. I have a bank account for the business, but recently I purchased some business supplies (tooling for a machine) on Ebay using my personal Paypal account. Can I just have the LLC write me a check to reimburse me for these business supplies? As long as I have a receipt and can explain why it was used for the LLC?

4
  • Tax laws change between different jurisdictions. So you may want to tell us what laws apply to you if you're asking about laws.
    – littleadv
    Jan 13, 2023 at 19:40
  • Hmm, I am in the state of Virginia if that helps.
    – Hunter
    Jan 13, 2023 at 19:41
  • The LLC just needs to keep a record of expenses.
    – S Spring
    Jan 13, 2023 at 19:48
  • The tax form for a single-member LLC is the Schedule C.
    – S Spring
    Jan 14, 2023 at 5:46

1 Answer 1

1

In the US, LLCs are disregarded entities and have no effect on your taxes (unless you explicitly chose to treat them as corporations). So for tax purposes this is a no-op.

To make sure you keep your liability protection intact (avoiding the "piercing of the corporate veil") you need to make sure you have proper bookkeeping and complete separation of your personal finances and your company's finances and treat the company as a completely separate legal entity as it is.

You'll want to talk to a Virginia-licensed attorney for guidance on how to manage the company without piercing the LLC corporate veil. The way you propose to manage the reimbursement expenses you've personally incurred for your business seems reasonable to me.

2
  • It does have an effect on taxes though right? I couldn't deduct the toolholders from my personal taxes, but I can deduct them from the LLC's income if they are a business expense correct?
    – Hunter
    Jan 13, 2023 at 20:39
  • @Hunter at least on the Federal level, there's no "LLC's income", it's all you. AFAIK same goes for State, but check with a local tax advisor
    – littleadv
    Jan 13, 2023 at 21:37

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .