Posted by JeffM on March 12, 2002 at 14:37:49:
I have a similar situation, only I own the company, in partnership with my wife. My accountant has explained it to me this way. A partnership does not pay taxes on it’s own, all proceeds simply pass to the individual via a partnership tax return (I think it is called a K-1, but I am not sure). In this way, all business expenses are written out of the Partnership checkbook, and whatever is left over becomes “pass thru” income to the owner. All that I do, to keep the audit trail straight, is write a check from the partnership to me as a"Distribution". Just be sure to pay your business expenses out of your business, and your personal expenses out of your personal account. Hope this helps.