Do you have a business checking account?
Hi all! I am just about to buy my first property in the Austin area, and I want to make sure I have everything I need in place before closing. I am looking to set up a checking account so I can keep my finances separate from my investing. My question is do you have a business account or did you just open up a personal account? I will not have an LLC or any other official business entity.
Please let me know if there are other factors I should be considering!
@Samuel Young Oh yes. My account has a thing about co-mingling funds.
It’s much easier to manage funds and e spends with separate accounts. This will likely be true for you and your accountant.
I'll definitely be creating a separate account but I am wondering if I should open a specific "Business Checking account" or just another personal checking account?
Quote from @Samuel Young:
I'll definitely be creating a separate account but I am wondering if I should open a specific "Business Checking account" or just another personal checking account?
This is the same question I have. I will not be opening up an LLC at the moment.
Quote from @Ku Thao:When I first started investing I didn't open a business account, however, I kept meticulous records of all business expenses and had documentation to back up everything. My accountant loves me! Ha! Once my portfolio grew and the properties were put in different entities, I opened a business account. My best advice, if you aren't good at keeping your books clean, open a different account just for your real estate investments.
Quote from @Samuel Young:
I'll definitely be creating a separate account but I am wondering if I should open a specific "Business Checking account" or just another personal checking account?
This is the same question I have. I will not be opening up an LLC at the moment.
@Samuel Young Solid input already here. I would recommended you check out the book "profit first". If you haven't already. It's a great way to begin looking at these kinds of questions from a more strategic nature and how you position said accounts.
My only account related advice aside from that if you decide not to read the book. Don't co-mingle your funds. Keep it simple for you and your CPA.
I have to same question. Verdict is I guess separate accounts. But is it better to have a separate business or personal account? Separate business account I guess will give you an ability to get a small business loan if needed.
Quote from @Kirsten M.:
Quote from @Ku Thao:When I first started investing I didn't open a business account, however, I kept meticulous records of all business expenses and had documentation to back up everything. My accountant loves me! Ha! Once my portfolio grew and the properties were put in different entities, I opened a business account. My best advice, if you aren't good at keeping your books clean, open a different account just for your real estate investments.
Quote from @Samuel Young:
I'll definitely be creating a separate account but I am wondering if I should open a specific "Business Checking account" or just another personal checking account?
This is the same question I have. I will not be opening up an LLC at the moment.
I might be missing some details regarding the "business checking account". When I go to different institutions that offer this service, it requires an "EIN" tax number or an entity type. Can I get a "business checking account" without one of the business entities?
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It doesn't really matter when you are a Sole Proprietorship. Just open a checking account and have the checks printed with your business name. Open a savings account too and put 20% in it (Or whatever you decide)
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Open a business account, I use Guaranty Bank & Trust in Austin
@Samuel Young
If you do not have a LLC you technically do not even need a separate bank account but should use QuickBooks or a spreadsheet to track all your income and expenses for the year for your tax returns
@Samuel Young simple answer: have separate account but just make it a personal account. You have no need for a business account without a LLC, especially since everything else will be in your personal name.
Quote from @Ku Thao:
Quote from @Kirsten M.:
Quote from @Ku Thao:When I first started investing I didn't open a business account, however, I kept meticulous records of all business expenses and had documentation to back up everything. My accountant loves me! Ha! Once my portfolio grew and the properties were put in different entities, I opened a business account. My best advice, if you aren't good at keeping your books clean, open a different account just for your real estate investments.
Quote from @Samuel Young:
I'll definitely be creating a separate account but I am wondering if I should open a specific "Business Checking account" or just another personal checking account?
This is the same question I have. I will not be opening up an LLC at the moment.
I might be missing some details regarding the "business checking account". When I go to different institutions that offer this service, it requires an "EIN" tax number or an entity type. Can I get a "business checking account" without one of the business entities?
In order to get a "business checking account", you will need an EIN number. I think a lot of first time investors start with opening a separate checking account and use it as their business checking account.
@Ku Thao you can't open a business checking account without a business (LLC, S-Corp, etc). You don't need a business checking account for a rent home in your own name. Just open two separate bank accounts. One for all operations and a separate one for the security deposits. This way those are not co-mingled.
Sorry to Hi-jack the thread. I'm thankful for all the responses. I did open separate accounts. One for income/expenses and one for security deposits that accrue interest. Thank you all again!