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What is a cheap bank account?

Does is matter what bank account type?

  • Lets say if i open a personal bank account but i want to use or indicate that a a business bank account can i do that. What is the main difference between a personal and a business account? do you have to open a business account if you have a small business and just want to separate money to organize it better. Also lets say i open a credit card with capital one. It asks me account type on the account i will use to transfer funds to cover my credit card expenses. Lets say the other bank is TD Bank personal account. Can i indicate its a business account if i want to use that card for business expenses or do i have to indicate its a personal account.

  • Answer:

    MAYBE - it depends. Say you like to build yachts. You start one of two kinds of business. "Mo's Yachts" is a sole proprietorship. it's just you, wearing a hat. Money you make as "Mo's Yachts" goes on your personal tax form (1040 Schedule B). So nobody really cares if you mix business and personal accounts. (though the bank would prefer you sign up for an expensive business account.) If you need to take checks for "Mo's Yachts", put that on your signature card at the bank. Done. "Mo's Yachts, Incorporated" is a corporation. It is a separate legal person. Separate SSN, tax forms, accounting and separate bank accounts. They CANNOT be mixed. Absolutely not, no way. Those require a business account. There are other kinds of business structures, but they all work like one of these.

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It's called money laundering if you mix personal and business finances. Open a business account and keep a ledger on it. Don't transfer money between the two, everything has to be a documented transaction to and from the business account. One way to get money from your business account to your personal account to sell your stuff to your business.

You have to consider the different tax obligations when opening a business account. Most places require certain types of identification when opening a business account such as what type of business it is (LLC, sole proprietorship, etc...) and also you'll need a TIN and a document stating the name of your business. It can get dicey. Speak with your financial institution for more details as far as business accounts go. If you're wanting to get organized be sure to keep in mind that most institutions require a paper trail for all business checking transactions so it will make it difficult to just transfer money from account to account. The reason institutions do this is so there is no unaccounted for money just in case you get audited for taxes. My suggestion is to open up a separate personal account if you just want to organize yourself.

You would have major problems combining business and personal funds. A business needs it's own Federal I D number. Your personal Acct needs your social. Your business is subject to different tax rules, and every dollar that finds it's way into your business account is subject to a business audit. If you want a separate account to organize your funds better, just open up a second personal account.

There is a difference between the personal and business account.Business account will help you to separate your personal funds from the business funds.So you have to open a business account if you are running a small business to handle your business transactions.For more information,I can suggest you to visit the site given below.Hope you will find the better information.

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