Posted by GL/CA on 1/7/06 2:05am
Msg #86817

BUSINESS VS PERSONAL CHECKING

I was told to have "one" banking account for business and personal. Comments and advice please. I was told the if I were ever audited my deposits into my "personal" checking account could be considered business income. Right now I have personal and a business checking accounts and my Quickbooks just has my business activities.

Reply by TCMN on 1/7/06 3:14am
Msg #86824

Ask your accountant or an attorney since I'm neither and can't give legal advice but this is how I do it.
If you have a business entity (corp, llc, etc) then you should keep them seperate because you would be paying yourself as an independant contractor AND an employee and it would be the way to get the most deductions, etc.
If you are potting all the income under your SSN then from what I understand is it wouldn't matter since it's your income. You would pay taxes different and just keep good records, but ask your accountant to talk over the way you want to go about it. They are two completely different ways of doing things.
I have a corporation and have several businesses under that umbrella and everyone has their own accounts and not just one in the corporations name.

Does that make sense?

Hope that helps.

Reply by CrystalT_FL on 1/7/06 9:00am
Msg #86838

I cant advise you, but generally the IRS wants to see a separation of business and personal stuff. (If you are an S-Corp or LLC, that is a *must* since your company is legally its own separate living breathing entity)

Your best defense for burden of proof is *always* backup records. Whoever told you that was probably thinking that as a sole proprietor, checks made out to you personally could be deposited directly into your personal account. As a sole proprietor, any audit would include both personal and business records, because it is all under the same tax ID number. Things like photocopies of checks, detailed logs etc can eliminate that suspicion. Consistency is your friend too - if you *always* make a habit of keeping things separate, its harder to bring up the "co-mingling" theory.

Again, no advice here - but if you are already using the more sophisticated system, why go back to the primitive one? ;-))

Reply by BobRogers_FL on 1/7/06 12:18pm
Msg #86862

It should also be noted that if you operate under a business name (at least in the state of Florida) as I do, such as: Bob Rogers d/b/a/ ROGERS Mobile Notary Service, you cannot deposit checks made out to the business into a personal checking account. The banks are not supposed to accept it. You must have a business account to deposit business checks.

Reply by IreneCA on 1/7/06 4:59pm
Msg #86909

What is Quickbooks?

Reply by Tina_MA on 1/7/06 5:19pm
Msg #86912

>>>What is Quickbooks?<<<

QuickBooks is a software accounting program that many of us like to use to keep track of our SA business.

I myself started with QuickBooks Basic and ended up upgrading to QuickBooks Pro a year or so ago. I definitely recommend the software.