However, adding separate bank accounts for your business can provide you with higher levels of asset protection and tax incentives while boosting the credibility of your business. When you run a business, you should absolutely keep your personal and business finances separate. You can use your EIN instead of your personal social security number when filing business tax documents, opening business bank accounts and credit cards, and many more business activities. But getting a business account and cards isn’t the end of the story. Now that you understand the importance of keeping your personal and business accounts separate, it’s time to set up accounts for your business. You run a business. Your assigned EIN will help to separate your personal and business activities further to help clearly draw the line between the two. If this is the case, separating your personal and business accounts now could save you a lot of work having to do it later on and help you to easily demonstrate to the lender your business’ full financial records. How to Keep Business and Personal Expenses Separate. If this is the case, separating your personal and business accounts now will help you to easily provide any lender with full financial records of your business. First things first: Make sure you set up a business bank account and get business credit cards (we often recommend Brex for growing startups). Here’s why: Business credibility: Having a separate account will show your clients you’re serious about what you do. The best reason to keep your personal and business accounts separate is to ease the strain of bookkeeping. While you may save on the transaction fees on card payments that some banks charge, there are several reasons why you should separate your business account from your personal one. It creates a sense of professionalism and helps you to actually feel like a serious business owner. Here are a few reasons why you need to have a separate business account: Bookkeeping. Build a Business Credit Profile and a Professional Image Keeping your business and personal finances separate goes a long way in helping you to do this. Running a farm will involve tracking a multitude of expenses, and blending those expenses into your personal finances will make for a headache. A separate business account can really help you keep track of your business income, as well as ensure that you are spending appropriately. As your business grows you may find you have to open a business account in order to get finance and further expand. This is the view of Debra Anderson, who is the owner of leading MYOB consultancy Anderson Tax & Consulting and a member of Australian Tax Office advisory boards. If you’re unsure of whether you should file jointly or individually, reach out to a CPA or tax professional. You can do this using just one institution if you’d like, but keeping your business banking at a separate bank can help make sure you don’t accidentally use your personal account for business transactions and vice versa. You should have a business checking account (and if possible business credit cards). By doing so, you’ll qualify for the best tax deductions and credits for your family. When you first launch your business as a sole proprietor, it may seem convenient to simply use your personal bank accounts for all of your transactions. Even if you and your spouse have separate bank accounts, you can still file taxes jointly. You can either go to your current bank and set up a business checking account, or look for one that doesn’t charge a fee. Being able to separate business from personal is important — especially if you end up facing an audit. Even if you are a sole trader! 4. NerdWallet offers a list of free business checking accounts sorted by state. It may pay to separate your accounts. Here are a few reasons why you should open a separate bank account for your business if you don’t already have one. As your business grows you may find you have to open a business account in order to get finance and further expand. In tough times, maintaining a separate business bank account will safeguard your personal finances and, to a certain extent, even provide you with mental peace and stability. One of the most useful things you can do when starting a business, is to keep your business finances separate from your personal arrangements. And if possible business Credit Profile and a Professional Image it may pay to separate account... Reason to keep your personal and business finances separate goes a long way in you! 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