Thanks SO much. That definitely helped. 🙂

Hi there!
First – definitely talk with an accountant. That said:
1. If you’re going to use PayPal for personal purposes, then it is easier to have a separate, personal account for personal purchases (i.e. clothing) vs. one you’re using for business purchases (client payments, office supplies). But you also don’t have to use PayPal at all if you don’t want.
2. Simply build it into your rate. You don’t have to separate it out as its own line item.
3. Keep any receipts related to business purchases and maintain a list of all transactions (date, what it was, etc.) that were business expenses. Then, come tax time, you’ll be able to enter them in or give them to your accountant so they can help you. 🙂

Hope that helps!

I have three questions…

1) When you say, “If you’re accepting payments via PayPal, you’ll want one account for your personal transactions and one for your professional transactions,” does that mean that once I open a PayPal Business Account, I *MUST* ALSO create a personal account in order to do business more effectively?

2) When it comes to charging clients through PayPal, are most people okay with you building in the 2.9% + $0.30 processing fee into your rate? I want to do this but I’m afraid it might turn away clients once I launch soon.

3) Lastly, how can I deduct the costs of setting up my business BEFORE it launched? I used my own personal debit card to purchase my web domain, hosting, etc and I’m not sure how to factor in these costs in order to save on the taxes I’ll eventually pay. (I’ve never paid taxes before as this is my first real job.)

Thanks SO much in advance!