I do some business consulting work through a registered sole proprietorship in the United States. I invoice my clients on a monthly basis through a paypal for business account, and have been transferring the money to an old personal checking account that I had previously only been using as a passthrough for paychecks.
The number of transactions is very low, the account only has money from the consulting business in it, and there are no other income streams going into the account.
I know that it is generally a good idea to have a separate business account, but is there any reason I would need to open up an actual business account for this money?
It’s definitely a good practice to do so. It will simplify expenses even if they are are ink used for the printer or Microsoft Office subscription. You’re asking if you should and I’m asking you why wouldn’t you?
I might be asking an even more basic question than that - How would it simplify my expenses to open a business account? Is that purely for transaction tracking, or is there some tax form I’ll get at the end of the year that simplifies filing?
I currently have a checking account that is only used for business purposes, but it is a personal account (as opposed to a “business checking account” from my bank, which has more fees and balance/activity requirements). I’m asking if there are any concerns with doing that in this situation.
It doesn’t. I use a personal account for one of my businesses. It is separate from my actual personal account. This used to save me alot of fees. There’s a few banks that have low or no fee accounts: PNC, Chase and a few local ones.