Question Details
I own a small henna tattoo business and currently use my personal bank account to pay for supplies, deposit income, etc. Is it necessary to have a separate business account for legal / tax purposes? Many thanks in advance!

Answers
The answer is yes, for many reasons . Most important two are : 1. You will manage your expenses and cash flow for your business in order to control what goes in and what goes out which help you to summarize what is really happening in your business finance at the end of the month cycle. 2. Most of the business owners, having a separate bank account for their business does give them a sense of ownership and achievement that the business they are doing is real and worthy regardless how small the revenue is. Good luck and always aim high ! Posted on 03/22/19
March 22, 2019
In addition to Sairan's very good answer, I would add that to survive an IRS audit it is necessary to have a separate bank account for your enterprise, keep good accounting records and not mix your personal income and expenses with our business income and expenses. Even though as a sole proprietor you are passing the income and expenses through from your business to your personal tax return, the IRS will not allow personal costs not related to your enterprise operation to be written off as business expenses. Posted on 03/25/19
March 25, 2019
It helps to have a separate account and credit card for business so come tax time, it is easier to find all your business expenses and make sure you get all the deductions to income. Posted on 05/15/19
May 15, 2019
If this is your main source of income have you thought about becoming an S Corporation? There are many good tax reasons but it does depend on your individual circumstances. If you would like to connect I can discuss it with you. Posted on 05/20/19
May 20, 2019