Do I need a Buisness Bank account?

Question

I am thinking of opening up an online buisness first through Ebay then hopefully through a website if things go well. The question is I want to keep my personal finance seperate from what I make on Ebay. Should I open up another personal checking account or should I open up a buisness banking account? Thanks for any advice.

Answer 1

yes but probably wait until you make some money first keep receipts etc until you get up and running

good luck

Answer 2

Marge is right. See how it goes for a short time.

It is true that personal and business finances should never be co-mingled.  It creates a ton of hassles, especially tax benefits or tax rates problems.

The IRS (being the Uber-Evil entity that it is) will certainly give you problems if they determine your monies are mingled.

Here's an idea to start with:

start your business as a DBA ("doing business as")

by checking with your local Business Regulation Office (or Courthouse) and get a business license.  In most areas, it is $50-$100 per year or less.

That will get your business "legally" started and will allow you to get an EIN (employer identification number), which is a tax ID for your business.

With that number, banks will allow you to set up a business account with business account perks.

This way, you will be able to file tax returns separately, and you will be allowed some business tax benefits you would otherwise not be allowed.

This will also show record of your keeping the two sources of monies separate.

As Marge said, keep good records;  your ISP costs can be deducted, and a good accountant/tax advisor will figure out a way to pro-rata the expense of your computer and operating epenses for your Ebay and website business. (shipping costs, domain/hosting fees).

Check with your bank, however, if you have been a good customer, they may allow you to open a DBA account before you obtain a DBA business license.

Answer 3

You really should have a separate business account, and keep your personal and business expenses completely separate, even if your business is a sole proprietorship.  

The biggest reason is for the IRS and state taxing agencies, so you can prove you're actually operating a business and the money you're drawing out of the business is legitimate instead of disguised drug money.