I am in the process of starting out as a wholesaler. While I haven't completed my first deal yet, I want to start to set different things up that are associated with my business. I know that I need to keep my personal finances separated from any income generated through REI. If for no other reason besides clarity, I understand that it is better to see money coming in (hopefully!) and going out if I keep the accounts separated. My question is......being as though my business is in its infancy stage right now, is it necessary for me to have a BUSINESS checking account, or will a PERSONAL checking (separate from my regular bank account) be sufficient for now?
Do you have a business name with its own separate tax ID number? If so, use that name and number to open the account. If not, I don't see that there would be any difference in a "personal" or "business" account, since either would be under your social security number.
You can use your personal account, but if it indeed will become a business, you should set up a business account. I might wait until I had my first deal, though.
I'll probably go ahead and set up a business account, but I don't think it's a big deal. I wouldn't lose any sleep over it. in fact, I would recommend sitting down with your banker a banker and ask them for their advice.
Setup a separate account. You don't want to have to reconcile your personal bank account on your books if/when you are business.
You can always set up the business account as a sole prop. That way you can run the business account separate from your personal. You also avoid paying state for an EIN number. When starting off, every penny is valuable at least to me it is.
More important that a separate account is separate accounting. You need away to track you income and expenses. A simple spreadsheet will suffice to start but presuming you become successful with this you should advance to something like quick books.
If you are doing business in you own name (sole proprietor) I see no reason for a separate bank account. If you choose to operate as a sole proprietor and you also chose a business name (Doing business as or DBA) a separate account becomes more important because you need an account titled in the name of your business to deposit checks made out to the business.
If and when you decide to operate as a separate entity like a corporation or LLC you must have a separate account.
Whether an account is a "Personal" account or a "Business" account is more a mater of a given banks rules and terminology.
I agree with @Ned Carey!
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing