Banking and Finance, Part Two: How to Open a Business Checking Account
This article is continued from Banking and Finance, Part 1: What Is Co-Mingling and How to Avoid It .
In order to help your business look better on paper and to better help you separate money and file taxes, it is important to create a separate checking account for your service. Many banks offer free checking accounts for businesses as long as you are able to make a minimum initial deposit.
This can be a great way to get an account and can result in the ability to maintain your funds without having to pay monthly fees. Opening an account is easy and takes only a small amount of your time.
If you have formed a sole proprietorship, you will need simply to apply for checks with your company name on them. You will be asked for an EIN, or employer identification number, and this is simply your social security number.
If, on the other hand, you chose to form an LLC, you will find that you will need to apply for an EIN from the Internal Revenue Service if you have not already done so. The process is remarkably simple and can be done online in a matter of minutes.
Providing your personal information, your EIN, and your minimum deposit should be all that you need to do.
When you open a business checking account, you will find that you are able to obtain personal checks that have your company name and business information on them.
You will be able to choose to use standard checkbooks like those used for personal checks, which are less expensive, or you will be able to choose business checks. The option is up to you, and it depends on your specific needs.
At any rate, opening a business checking account is easy. You will find that it can simplify many aspects of your business.
Most of all, however, it enables you to easily keep business income and expenses separate so that you can easily itemize and create deductions when tax time comes around.