Rental Property Investor · Katy, TX · Member since 2015 · 49 posts · 10 votes
Hello my fellow investors,
I'd like to ask your opinion regarding bank accounts. At which stage do you guys think I should open a business bank account?
My plan is to flip houses and wholesale deals. I am in the earlier stages of investing, but I've already been spending money with direct mail, LLC fees, website, training...all of these I used my personal credit card for payment.
@Tatiana C. - As soon as you start having business expenses you should have a business bank account. Every time you need to pay something for the business transfer money from your personal account into the business account and then write the check from the business account. This makes IRS audits and end of year tax filings so much easier to justify what was a business expense and exactly how much owner equity you have contributed. Anything else could just become a tax nightmare if you can't prove every single expense coming from your personal account, the IRS will assume it was a personal expense.