Lots of small businesses run through one account or card for everything. That's fine, as long as only the business part ends up on your tax return. On Bank import, every line you review gets one of these.
Personal
Tap Not business, then Personal, for anything that wasn't for the business, like groceries on a shared card. A personal line never counts as income or an expense.
The next time a line comes from the same place, CollabNorth offers Personal first.
Part business, part personal
Some bills are both, like a phone plan or internet you use for work and at home. Tap Not business, then Part business, part personal. Type the business amount, or tap 25%, 50% or 75%, and pick the category.
The business part becomes an expense waiting in Expenses, To finish. Use a fair share you could explain to CRA, like the share of your phone time spent on work, and keep the bill.
Money you took out or put in
Moving money between the business and yourself isn't income or an expense:
- Money I took out for myself is a draw: paying yourself from the business account.
- Money I put into the business is a contribution, like topping up the account from your savings.
Both are recorded on the ledger only, under money between you and the business. Nothing changes on your T2125 or your GST/HST return.
If you have a corporation
A corporation's account belongs to the company, not to you. So when the company pays for something personal, CollabNorth records it as money you took out, both for Personal and for the personal part of a split. That keeps the company's books balanced.
Money you take out of a corporation is usually salary, dividends or a shareholder loan, and each is taxed differently. A shareholder loan not repaid within a year of the company's year-end can become your income. See Corporations: shareholder loans and Corporations: salary or dividends, and talk to your accountant about how to pay yourself.
Transfers and card payments
Moving money between two business accounts, or paying off the business credit card, isn't income or an expense either. Tap Transfer. The card's own purchases are the expenses: import the card's CSV too.
Better: a separate account
A separate bank account (and card) for the business makes all of this easier, and it's the simplest proof for CRA of what was business. It's still worth marking personal lines if you haven't opened one yet.