Should I have a business checking account?

evilclown

10 years ago

Keep your business and personal finances separate.

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LegendaryGuy1

Banned 10 years ago

You should keep your business life and personal life separate. I recommend you create a business account for your internet marketing projects so that you don't get mixed up between that and the personal account. It helps a lot especially when seeing if you received a profit, loss etc.

As for the personal PayPal account, I'm not too sure about that but I use my personal account but will be switching to a business account in a while. There has been no issues with it as of yet.

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JohnMcCabe 10 years ago

My advice?

Get the business checking account, open a PayPal business account, and consider getting an EIN (business equivalent of a Social Security number). Keep you business and personal income and expenses separate.

The EIN and PP account are free, and you can often find free options for the checking account - start with the bank where you have your personal account.
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BellaGeen

10 years ago

I have checked with PayPal directly - they have no issue to have 2 accounts - one for personal use and 1 for business use.
In general - I always prefer to ask and file the answer, so I have reference if something pops up....

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IMMer1975

10 years ago

This is often a critical error. People incorporate thinking it offers them liability protection. Yet, then they commingle finances. A lawyer on the other side will do what they call "piercing the corporate veil" and effectively pierce through any liability protection you thought you were getting from the corporation and attach personal liability. There are a number of ways to do this, but the fastest is showing commingling of finances. You didn't say if you incorporated, but if you do, make sure you keep personal separate from business.

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bsurb

10 years ago

All I want to do is keep track of the profit/loss, all expenses, etc. Every time I ship an item out I keep the receipts. If I file to pay taxes in the state and charge sales tax, I can file my taxes at the end of the year correct? and turn in my receipts for when I shipped the items out?

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Tsnyder

10 years ago

Originally Posted by bsurb

All I want to do is keep track of the profit/loss, all expenses, etc. Every time I ship an item out I keep the receipts. If I file to pay taxes in the state and charge sales tax, I can file my taxes at the end of the year correct? and turn in my receipts for when I shipped the items out?

If you ever get audited by the IRS you will wish
you had a separate business account... be smart
and trust me on this point.

Why wouldn't you want one?

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JCorp

10 years ago

I started off using my personal account and did ok, but it would have been better to simply open a business bank account.

As many people have said, keep personal finances separate from business finances.

You don't necessarily need to start a corporation or LLC, I started off with an S-Corp and regret it. You can easily just start off as a sole prop, set up a business bank account and you're off to the races.

Once you've made some money, then you can invest in a CORP or LLC and an accountant or book keeper (if you don't have one already).

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bsurb

10 years ago

Im not talking about an LLC. What I mean is filing for sales and use tax in my state.

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Tsnyder 10 years ago

Originally Posted by bsurb

Im not talking about an LLC. What I mean is filing for sales and use tax in my state.

If that's all you're worried about you aren't thinking
in a large enough scope. See my post above about
being audited.

Get the business account.
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brentb

10 years ago

Easiest way to do this: go get a DBA at least. ($25-50 fee) Open a checking and paypal account in new business name. (Free)

Now you should keep that all separate.

I always want to spend business money if it was in my personal account so if I need it, I just pay myself a paycheck and then use the money. The rest stays for the business. The business needs some money for operating and reinvesting.

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JohnMcCabe 10 years ago

Originally Posted by bsurb

Im not talking about an LLC. What I mean is filing for sales and use tax in my state.

Start here:

FL Dept Rev - Florida Sales and Use Tax

For a federal EIN number (free and immediate, online) go here:

Apply for an Employer Identification Number (EIN) Online

Open a PayPal Business Account to go with your personal account, also free.

Open a regular checking account in your business name (free to ~$10/month, depending on the bank).

Keep good records, and you're in good shape at tax time. Check your local office supply store for a variety of inexpensive software that are designed for small business bookkeeping, or look for Office templates online.
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mathewboly

10 years ago

Obviously you should keep your business account & personal account separately. Most of the time any business has personal identity, it has a specific name, There are so many facility in separate accounting system. It is easy also to keep the account calculation.

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bsurb

10 years ago

OK I was just wondering. I am going to open a checking up this week. But I am pretty sure I need an IEN # or tax ID # before? The bank will probably ask.

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JohnMcCabe

10 years ago

Originally Posted by bsurb

OK I was just wondering. I am going to open a checking up this week. But I am pretty sure I need an IEN # or tax ID # before? The bank will probably ask.

I repeat myself:

Originally Posted by JohnMcCabe

Start here:

FL Dept Rev - Florida Sales and Use Tax

For a federal EIN number (free and immediate, online) go here:

Apply for an Employer Identification Number (EIN) Online

Open a PayPal Business Account to go with your personal account, also free.

Open a regular checking account in your business name (free to ~$10/month, depending on the bank).

Keep good records, and you're in good shape at tax time. Check your local office supply store for a variety of inexpensive software that are designed for small business bookkeeping, or look for Office templates online.

:rolleyes:

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talfighel

10 years ago

You can use your personal account for business.

Just make sure that what ever you are making, save all your receipts for taxes. Same thing for all your expenses.

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Tsnyder

10 years ago

Originally Posted by talfighel

You can use your personal account for business.

Just make sure that what ever you are making, save all your receipts for taxes. Same thing for all your expenses.

I hope you never get audited. You'll learn the evils of co-mingling funds.

Get the business account... I don't know why this is even a discussion <smh>

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Alexa Smith Banned 10 years ago

Originally Posted by talfighel

You can use your personal account for business.

Nothing personal, Tal, but please excuse me for stressing yet again what John McCabe and Tsnyder (among others) have been so patiently and repeatedly saying above, for the benefit of those who choose to listen to it. You should never use your personal account for running a business. There can be all kinds of potential problems arising from that, some of them all too apparent and others rather unpredictable.

I don't know what "smh" stands for, but like Tsnyder, I really don't understand why this is even a discussion at all.

It shouldn't be, and especially not in a business forum "where we talk about making money": in all the ways that matter, you can't actually run a business that doesn't have its own bank account: you can only pretend to be running one. You might fool some other people, and you might even fool yourself, but you certainly won't fool your country's tax authorities or any other officials to whom it might ever become important.
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Green Moon

10 years ago

Using your personal bank account for business is a bad idea. If you consider it a business, treat it like one.

Obviously if you have a separate entity such as an LLC or S corp, keeping the finances of the entity separate from your personal finances is a no-brainer. But even if your business is just an unincorporated proprietorship - in other words, and extension of YOU - opening a separate bank account will not only simplify tracking the business income and expenses, it will also help put you in the right frame of mind to treat the business as a business.

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1ebooks

10 years ago

you know a lot of biz on the net is via paypal

they give you a free paypal CC to use at ATM's

only drawback is 400 bucks a day cash withdrawl limits

so once you learn to make bank, you may need a few paypal accounts all with CC's so you can do the PP tour in your ferrari/rolls/benz whatever and take out 400 bucks every atm near you.

LOL

plus PP is still cyber money, no real reporting yet to govs

sure the gov's are trying to document cyber cash

but so far pp is still outside any main jurisdiction

unless they changed it

now we just use a non profit in the caymans

but you can bank a lot and do the ppc tour

Plus now they have the reader so you can even bang PP in person with clients if you see any F2F

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Tsnyder

10 years ago

Originally Posted by 1ebooks

you know a lot of biz on the net is via paypal

they give you a free paypal CC to use at ATM's

only drawback is 400 bucks a day cash withdrawl limits

so once you learn to make bank, you may need a few paypal accounts all with CC's so you can do the PP tour in your ferrari/rolls/benz whatever and take out 400 bucks every atm near you.

LOL

plus PP is still cyber money, no real reporting yet to govs

sure the gov's are trying to document cyber cash

but so far pp is still outside any main jurisdiction

unless they changed it

now we just use a non profit in the caymans

but you can bank a lot and do the ppc tour

Plus now they have the reader so you can even bang PP in person with clients if you see any F2F

This qualifies as the worst advice I've ever seen offered on
this forum on any topic.

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Leon Zykos

10 years ago

Hi,

I would advise getting the business and personal accounts separate because it can be confusing when it comes to determining if you are using company profits for your own personal expenses.

Hope that helps.

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bsurb

10 years ago

Even if inside the woocommerce panel keeps track of sales?

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Tsnyder

10 years ago

<smh> = shaking my head

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Joe Mobley

10 years ago

Originally Posted by bsurb

I googled and seen where people said you could use your personal account as long as you're not claiming personal expenses on your taxes and so on.

Originally Posted by bsurb

My site is fairly new. I'm not making a ton of money right now. But I want to charge local tax if I sell products that way I can claim them...

I see there is great conflict with you obi wan.

Originally Posted by bsurb

Any ideas?

You have heard (seen) wisdom from the great and the small and still you resist. Perhaps you are not ready.

Joe Mobley

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Should I have a business checking account?

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