As a small business owner, you may think that you do not need a separate bank account for your business, but doing so can save you a lot of headache in keeping track of your business expenses.
A business bank account here in Bloomington is a very important factor in running a business because it can prove the legitimacy of your business in case the IRS decides to do an audit on your business.
Aside from that, there are more reasons to keep your personal and bank accounts separate.
Safeguard Your Personal Assets
Separating your personal account from your business account will help protect your assets just in case something unfortunate happens to your business. By ensuring that your business is a separate entity from you personally, the plaintiff cannot go after your personal assets in case they sue your business.
Stay Organized During Tax Season
Having to sort through your finances to determine whether the expense was for personal or business makes bookkeeping extra challenging, especially during tax season. Something as simple as opening a separate business bank account can help you avoid this problem.
Keep It Professional
Using your personal account when you issue checks to suppliers or ask for payments does not look very professional. Potential clients may even doubt the credibility of your company and choose not to do business with you.
Show The IRS That You Are Serious About Your Business
Owning and running a business is not as easy as it seems because you need to prove to the IRS that you are a legitimate enterprise and not just a hobby.
Should you ever find yourself on the receiving end of an IRS audit, you can confidently show them your business bank account to prove that you are not simply running a business for hobby purposes.
It would further prove the legitimacy of your business if you could also present business cards and a well-maintained set of business books.
It also adds an air of professionalism to your company to help your clients feel confident in doing business with you.
