November 28, 2009 
This entry was posted on Saturday, November 28th, 2009 at 11:46 pm and is filed under Accounting, Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Setting up the bank account for your small business can be a very exciting thing to do. Often with self employed or sole proprietors they will use their small business banking and their personal banking as one account. They believe that by doing this they will reduce expenses and bank fees. But this can be a disastrous mistake. Here are some reasons why you should not combine small business and personal banking.
When it is time to do taxes you will have to separate business and personal expenses. It can be difficult with many mistakes figuring out which ones are business and which ones are personal.
It is important to have a clear trail of what income and deductions were used for the business. When you combine business and personal the trail is not clear. This can cause problem with the IRS.
It is very easy to make mistakes when you combine the personal and business bank account. If you were to miss a deduction then it can cause you to lose money.