All debt incurred on behalf of the school is payable by you, the proprietor. Lenders customarily require signatures on debt agreements by both the proprietor and spouse (if any).
For business and financial management purposes, it is best to maintain completely separate records for your school and your family or household. To ensure you have documentation needed for income tax reporting purposes, it¹s highly recommended to use separate bank accounts and separate credit arrangements for your business and your family affairs.
If credit is used in your business operations, it¹s particularly important to maintain a separation of finances and records for your business unit and your household. Interest payments on personal debt are not a deductible expense for federal and state income tax purposes, while interest payments on business borrowing can be fully deductible.