Do you have a business checking/credit account?

[Cammie]

I've wondered if I should get a seperate account for my business? I'm just a sole proprietor, so I don't *think* it would be necissary but perhaps those of you with more experience know otherwise? I guess it might make accounting easier.

I do have one credit card with a low limit ($1000) that I'm planning on using exclusively for my business purchases, but it is the only credit card I have (I'm not a fan of huge sources of credit) so maybe I should get a business CC? I don't like using credit but I do like having it as a back up for emergencies.

The main thing right now that makes me think having these accounts might be nice is to cover the taxes I'll be running into. Back in my 'non-self employment' days I had my property taxes escrowed(still do) and my city/state/local taxes taken out of my paycheck. I'm kind of nervous at the thought of now having to poney up that dough like another regular bill. I like organizing my budget to manage itself so to speak.

I appreciate any feedback, thanks!

 

[shibby]

Do you have a business checking/credit account?

Definitely. As a sole proprietor it is very important to keep things separate. It will also make accounting easier at the end of the year. Getting a program (Quicken, Quickbooks, etc.) to keep track of income and expenses is also a good idea.

 

[adam_l38]

Do you have a business checking/credit account?

Ditto what jdcan said. The IRS also seems to view businesses *with* a separate business checking account more like an actual business, rather than as a "hobby"...

 

[No 1....]

Do you have a business checking/credit account?

I would definately open a separate account. Easier taxwise and otherwise...

 

[Sukai__<3]

Do you have a business checking/credit account?

I had a checking account and a savings account, and as a sole proprietor I usually referred to the savings account as the "business" account, but I wasn't all that emotional about keeping them separate. But you do have to account properly regardless. I was diligent with keeping track via Excel spreadsheets. They're not hard to set up. Using a separate bank account to track deposits (income) and withdrawals (expenses) is an easy way to go, but it's not the only way to go.

 

[sol]

Do you have a business checking/credit account?

Definately seperate accounts. It is required if you're going to be accepting credit cards (I'm guessing you do from this thread: accepting credit cards?) When you accept credit cards, the funds are automatically deposited into your checking account. While you can have them go to a personal checking account, your bank will eventually catch on and require you to open a biz acct anyway.

 

[jess:]]

Do you have a business checking/credit account?

Keeping your business and personal finances separate is a good strategy for avoiding many potential problems, and can greatly simplify doing your business taxes.

 

[winifred]

Do you have a business checking/credit account?

I actually do have 2 checkings, one I sort of used as a savings or 'overflow' account and I don't have any checks for that account. Now its going to be the account that I have the CC transactions deposited into, but its not exactly a 'business' account per se, even though thats what its purpose is turning out to be.

Its tricky though when I have cash paying clients, and I go to make a deposit and have bills to pay. Its just easier to deposit into my personal account versus into the alt checking and then 'transferring' it. Don't things like that defeat the purpose of having the seperate accounts?

I applied for a business CC the other day, I decided I'd prefer to keep the one I have as personal only and while I don't like using credit I do like having the one card for convenience sake

 

[banzai]

Do you have a business checking/credit account?

As far as the tax laws are concerned, a sole proprietorship means you and the business are one tax entity. I chose to have a separate business checking account, but at tax time, that never enters the picture. My accounting is done daily, receipts are entered and stored daily, and at the end of the year my tax information is ready to go. The IRS has never questioned what was cash or check, what was deposited into which account or written from which account - the business creates extra forms to fill out for the taxes, but the taxes are all filed in my name only. If I was ever to be audited, it's the accounting paperwork and receipts they'd want to see.

My purpose in having a separate account was for the sake of professionalism. If I'm making a business purchase or paying my independent contractor, I use the business check or debit card that has the business name on it. When clients write checks, they write it to the business name. When online gift certificates are purchased, their receipt and credit card invoice has the business name.

 

[Pompal 09.]

Do you have a business checking/credit account?

Yes on the seperate acct!