6. Personal use of business funds. Keep your business and personal funds separate. Why? Mixing your funds is a messy way to run your business. In an audit, the IRS may consider your business a hobby and deny your deductions altogether. You can also jeopardize any legal protection you might have had when you mix your business and personal funds. If you haven’t already, set up a separate business account to pay for business expenses. The same goes for credit cards — apply for one that you use only for business purposes.