1. Separate business activity

   Use dedicated business accounts where practical. Identify personal charges and owner transfers rather than treating every withdrawal as an expense.

2. Record each transaction

   Capture date, vendor, amount, category, and business purpose. Keep receipts, invoices, and proof of payment together.

3. Reconcile every month

   Match your books to bank and card statements. Review missing receipts, duplicate entries, refunds, and uncategorized transactions.

4. Back up and retain records

   Keep readable copies with secure backups. Retain records for the period applicable to the transaction, including longer-lived asset and payroll records.

A bank statement alone may not establish what was purchased or its business purpose. A recorded expense is not automatically deductible.

Guidance checked October 19, 2026. Follow the current IRS instructions for your tax year.