# Personal Account VS Business Account



## luckky01 (Oct 15, 2014)

Hi! I am starting a very small online t-shirt business run at home(sole proprietorship) and was wondering if it's OK to just open up another personal bank account for expenses that I will be using for my business. Or do I HAVE to open up a business bank account? If I start by opening another personal account, then will I be able to move that to a business account when my business does get bigger? Also is there any way that I can get in trouble with the IRS with this if I open another personal account instead of a business account? I would appreciate some answers! Thank you!


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## binki (Jul 16, 2006)

You don't have to do either if you keep good books. The income will all flow to you anyway. If you want to do a separate account you can. Personal is fine. Keep in mind if you open a biz account at your bank you will be in for a ton of fees.


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## forevercamismom (May 18, 2015)

Had been just using a separate account but my business grew faster then I thought it would. Ended up opening a business checking account

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## NoXid (Apr 4, 2011)

Business accounts typically do have more fees than personal accounts, but it varies a lot by institution.

I had personal accounts at 3 credit unions (not banks) and one of them had a No Fee business account, so that is where I setup my business account. No fee for deposits or transactions, no matter how many. No monthly account fee ($6) if average balance of $1000 or more.

Check out your local community banks _and_ credit unions. They are likely to have much more user friendly small business accounts than your typical big bank.

In most cases you'll need a Federal EIN to setup a business account, but state laws and company policies vary on this.


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## tchandler52 (Sep 17, 2012)

Some credit card processing companies may request that you have a business checking account to accept payments on your website. Also when you want to show proof of additional income if you ever decide to apply for a loan, they may also request to see statements from a business checking account.

I think it you are planning on taking your new business serious go for a business checking.


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## Tricha7604 (Jan 25, 2011)

It does not have to be a "Business" Account but do have a separate account. You do not want to pierce the corporate vail..... Meaning keep your business and your personal things a arm lengths away. This will keep you out of legal trouble down the road if anything comes up. Better safe than sorry in my opinion.


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## Ripcord (Sep 2, 2006)

At first I'd just keep the account you already have and account for your business income and expenses. No real reason to put different money in separate accounts. It's all your money anyway.


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## Liberty13 (Aug 2, 2015)

I was having this same discussion with my wife the other day. Think I'm going to go with the personal account for the time being.


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## gnizitigid (Jan 23, 2007)

My friend started with business account two years ago


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## richard johnson (Sep 29, 2015)

binki said:


> You don't have to do either if you keep good books. The income will all flow to you anyway. If you want to do a separate account you can. Personal is fine. Keep in mind if you open a biz account at your bank you will be in for a ton of fees.


I agree with you. Personal account is fine as you are starting small business now. Business account has different fee which can be problem for you.


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## Printavo (Oct 7, 2007)

You don't have to open a business account but you do want to keep income/expenses separate than your personal account. Also look into opening a personal and business Chase credit card to get a bunch of points to travel.


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## binki (Jul 16, 2006)

Printavo said:


> Y...Also look into opening a personal and business Chase credit card to get a bunch of points to travel.


+1 on this for any biz card that has points, miles or money back. They very often are unlimited for rewards where consumer cards may not be. 

Just remember that a biz card does NOT have the same protections as consumer cards. This applies to statement periods, interest rate changes, fees, protection and so on AND you still have to personally guarantee payment. 

Now they can extend courtesy to you but never expect them to give you a fair shake.


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## Screen Medics (Feb 23, 2015)

It is almost impossible to operate any business without accepting credit cards. That means you must have a merchant account to process those sales. 
Check this out before you make a final decision on type of account you choose. Don't just sign up with the first merchant account you check out. Costco even has a merchant account service which may be a savings over others and beware of signing up for multiple year contracts or self-renewing contracts. Those scams are frequently thrust on the unsuspecting.
Screen Medics


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## kevinYun (Nov 6, 2015)

You can hire an Business account of agency  it's possible


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