[Freedom]

For the Entrepreneurs here, I would like to ask about bank accounts relating to taxes. I know that if you have a business and a tax id (TIN) it is better to have separate bank accounts (personal checking and business checking). That way you can deduct business expenses easier than if they were mixed with your personal transactions.

My concern is how are the checking accounts distinguished when filing taxes or checked by IRS?

Can it be any two separate checking accounts?

I'm familiar with Schedule-C so is it any different if you have a business as opposed to being a sole proprietor?

[WestIndianArchie]

redacted

[reaper23]

you absolutely 100% must have separate bank accounts. one of the primary reasons for having a separate business is for risk mitigation.

if you co-mingle funds then you open yourself to risk personally, not just for the business.

any decent lawyer will be able to "pierce the veil" of your corporation and break down the walls of liability separation.

i strongly urge you to have a business account for your business and a personal account for personal.

[Freedom]

(02-01-2012 10:03 AM)reaper23 Wrote:  

you absolutely 100% must have separate bank accounts. one of the primary reasons for having a separate business is for risk mitigation.

if you co-mingle funds then you open yourself to risk personally, not just for the business.

any decent lawyer will be able to "pierce the veil" of your corporation and break down the walls of liability separation.

i strongly urge you to have a business account for your business and a personal account for personal.

Thanks for the input. How would I get into such situation in court? Is it only if some business or client wants to sue me?

[thegmanifesto]

My advice:

1. Get separate accounts

2. Get an accountant

3. Get a tax attorney

[Freedom]

I talked to a CPA today, referred to me by a client attorney and the conversation wasn't so informative. I feel like I got better feedback on this thread.

This guy's title is (Attorney & Counselor at Law - PC CPA) so I'm even more surprised at the lack of information i got. I'm guessing I should keep on looking. His fee is $600 for to do annual taxes. Does anyone else use a CPA here?

My apologizes if this is too much legal info in the "Lifestyle" section.

[reaper23]

(02-02-2012 05:46 PM)Freedom Wrote:  

(02-01-2012 10:03 AM)reaper23 Wrote:  

you absolutely 100% must have separate bank accounts. one of the primary reasons for having a separate business is for risk mitigation.

if you co-mingle funds then you open yourself to risk personally, not just for the business.

any decent lawyer will be able to "pierce the veil" of your corporation and break down the walls of liability separation.

i strongly urge you to have a business account for your business and a personal account for personal.

Thanks for the input. How would I get into such situation in court? Is it only if some business or client wants to sue me?

yes, and that will happen more likely than you assume. you know how people are crazy and stupid? well, thats who you will be dealing with inevitably.

better safe than sorry

it is the entire reason "limited liability" companies (LLCs) evolved.

[reaper23]

(02-03-2012 11:49 PM)Freedom Wrote:  

I talked to a CPA today, referred to me by a client attorney and the conversation wasn't so informative. I feel like I got better feedback on this thread.

This guy's title is (Attorney & Counselor at Law - PC CPA) so I'm even more surprised at the lack of information i got. I'm guessing I should keep on looking. His fee is $600 for to do annual taxes. Does anyone else use a CPA here?

My apologizes if this is too much legal info in the "Lifestyle" section.

i use a CPA and have found that the right/best one is just as valuable if not more than an a great attorney.

i spend about $1500 a year to have my taxes done. worth every single penny.

dont scrimp on legal and accounting advice...it will only cost you in the end.