Personal expenses with a business partner
November 21, 2024
by a searcher from Yale University - School of Management in San Francisco, CA, USA
I'm starting a business with a partner and we're 50 / 50 partners in responsibilities, funding, and ownership
We would like to take advantage of the tax benefits of deducting business expenses
For some items (e.g., vehicles, meals, etc.) this feels trickier to do with a 50 / 50 partner than it would if you're a solo owner because the expenses won't be equal. For example, the car owner A wants to buy is different than the car owner B wants to buy.
Part of a healthy partnership seems to be a mutual understanding that it will never be perfectly 50 / 50
But we're curious how have others approached this?
On a similar note, we'd love to learn best practices on how to maintain clean books so that it's easier to justify EBITDA if we decide to sell.
Thanks!
from Columbia University in New York, NY, USA
I would create a shared guide with expense guidance and limits. You'll also want to specify a threshold where the expense needs to be approved by the other partner no matter what.
Then get in the habit of receipt tracking and running expense reports. We use RAMP for QBench, but if that's overkill, Expensify is a nice alternative focused on receipt and expense management.
from American University in Fairfax, VA, USA