BusinessBusiness Insider

Self-employed? These 3 products make paying your taxes easy

A business checking account

BBVA Compass

Separating your finances is a must when you’re self-employed. While you aren’t legally required to have a business checking account as a sole proprietor, (you are required to keep business and personal money separate as an LLC or corporation), opening one is the best way to keep your finances organized.

For one, having a separate checking account for your self-employment income and business expenses simplifies your taxes and saves you hours of sorting through jumbled-up charges. It also lends you some extra credibility as a business owner, and seeing your business’s earnings and expenses all in one place makes it easy to assess your performance.

Finally, if you registered as an LLC to protect your liability, intermixing your business and personal finances can demonstrate to a court that there isn’t a clear line between the two, and someone could come after your personal assets more easily.

I opened a business checking account with Chase because it was offering a $300 cash sign-up bonus if I deposited $1,000 at the time. The process was about as quick and easy as opening a checking account, and because I’m a sole proprietor, I didn’t need to present much in the way of additional paperwork. This account does charge a $12 monthly fee, but I’m able to get it waived by maintaining a balance of at least $1,500 in my checking account.

When comparing business checking accounts, you want to go with one that either has no monthly service fee or one that has a waivable monthly service fee, but only go with the latter if you’re certain you can meet the requirements each month to get it waived. Other traditional banks tend to require even higher minimum balances than Chase to get the monthly fee waived. However, a number of online banks and credit unions offer free checking accounts.

Axos Bank Business Checking and BBVA Compass ClearConnect for Business are two of my favorite low-cost business checking accounts, although your local credit union might offer a comparable option.

If you’re already a member of a credit union, it’s worth checking with them first to see what business checking options they offer.

Folks who are comfortable with doing their banking online will find that Axos Bank Business Checking is an excellent free business checking account. In addition to not charging a monthly fee, they also offer unlimited ATM fee reimbursements. You do have to make an initial deposit of $1,000 to open an account.

For those who prefer to have access to physical branches and require a lower opening deposit, the BBVA Compass ClearConnect for Business account has no monthly fee and can be opened with just $100.

If you need an account with a $0 minimum opening deposit requirement, Capital One’s 360 Checking is a simple, free, online-only personal checking account that will get the job done. You can always open a second personal checking account for your business finances, as long as you’re okay with using your personal rather than business name and don’t need business account features like employee debit cards.

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker