Should I deposit checks from my new side business in my personal checking account or start a business account?

Answer 1

My bank wouldn't accept a check written to my new business in my personal account. I had to have an account in the bus. name. And I had to show them a business license to get it!

Answer 2

It really depends upon a lot of factors. Are the checks made payable to you and are they relatively small, say $500 or less? If they are to you, rather than a business name, and somewhat small, then your bank probably won't have a problem depositing them into your personal checking account and NOT putting a hold on them. If you follow this route, then still make a copy of the checks for your records. If one gets returned for NSF, the bank may not even send the check back; everything is scanned nowadays. Plus, you will want to keep track of your income from your new business.
If you are making say, $5000 or more per year, I would definitely open the business account. The bank or credit uniion will require a fictitious name statement if the name of the business is something other than using your own name. Then, they will require an occupational license, copy of your driver's license, and if a corporation, a copy of the articles of incorporation. Most likely, they will run a credit report to see if you are credit worthy for a business account. If you have average credit (600 with Equifax), then most likely they will be happy to open your business account, order you some checks, a business stamp, zipper bags, a ledger, the whole business look for your new checking account.
Good luck and welcome to the Business World! May you turn a sizeable profit in the years to come.
KathyW

Answer 3

You need to get a business account. This way you can tell how much u have to put into your business. (ex. If you had to buy something for your business you could write a check or use credit for your business account. That way you wont have to go back later and add everything up. You can just see it under your business account.) You should take a certain percentage out of your money that you made from your business.(25% to %50%) Put this money in your personal account and then you can make yourself your on paycheck.(Your pay will go to your personal account) Then u would have money to spend personally and money to use for your business. You can use your personal account for what you buy for your entertainment. You can use your business account for equipment that have to buy or monthly bills only for your business. Such as your lights for your office and building rent NOT for your house payment or your car bill.

In short terms it will help you in the long run. This way u would see a lot of your money and get more things. You just do it like it was a real job.

Answer 4

I do not agree with the majority here. You stated that this is a side business. This indicates that it is very small. A business checking account is very expensive and is not necessary in your case. If you keep good records in a simple log of the expenses and the income, and simply tag things in your account as business or personal, there is no reason you should have to open another account and have to deal with two balances, two books, two statements, etc. Just be sure you keep good income records and all of your rcpts for expenses.
If you did open another account, there is no need for a business one - get a personal account and mark it "special account" on the checks.

Answer 5

My husband has a side business, so we started a personal checking account with his name "dba." That way we could deposit checks made out to his business. Many banks require that you have a separate account. We can easily transfer money between the accounts.

Answer 6

I would set up a new business account, just to keep everything clean. Once you start muddling up your personal and business accounts, you will have a hard time determining exactly how much you are making net profit as well as the tax implications. Other complications may occur if you were required to provide proof of your company's income, such as during an audit or a home loan application.

Answer 7

Start a business account. Most banks have low interest business checking accounts. It is called co-mingling of funds when you mix business with personal. (Lots of folks do it but...)
It is much easier when tax time rolls around - all of your business expenses and income are in one place. You should optimally pay all of your business bills out of this account as well.
Sometimes, when you first start in business, it seems like an overwhelming extra step. Postulate yourself sucessful and act as though you are - that may be your first step to a prosperous enterprise. Good Luck!

Answer 8

If you are NOT incorporated, you can run all your business and personal finances from your business account.
Are you sure you want to do this. A CPA or YOU will then have to code or sort out all the personal draws that you have made in order to compute your income and business profits. This can be a nightmare, open for audit.
IF you are INC. DO NOT, DO NOT intermingle business and personal funds. IT's unlawful in a Corp. Draw a salary check.

Answer 9

You should open a business account that way you do not confuse business with personal and you also will be able to keep track of what comes in, & what goes out and what for. This is easier when tax time comes around. Be sure and keep all receipts incoming and outgoing. Keep track of mailing and supplies, milage etc.,etc.
Good luck.

Answer 10

Fro IRS purposes, get a business acount with a fictitous business statemet. UNLESS, it a job operated out of your home. In this case, you do not. Beware: the IRS will accept business losses for three years beore they exoect a profit. If you have decent sized profit, put yourelf on quarterly estimated taxes. I used to run buisnesses out of my home but never bothered to get a buiness licence since my home was my office to a certain extent. If you employ others, getting a buiness account is what you need as well a completed form and submitted form to the IRS stating you have employees. If you pay one person, you have an employee. You will ned to file an FEIN (Federal Employee Identification Mumber). I made all of my loved ones oficers. I am President, my daughter is CEO, and my other daughter of CFO Oh, by naming my cildren as officers, we are exempt from payroll tax. We run a non-orifit organization but we allot ourselves a salary to keep this charity business rolling. Good luck.