Bank account and bookkeeping

Keep business money separate from day one. It makes taxes and loans easier.

Do this

1. Bring your tax ID and paperwork. That’s your EIN, or your Social Security number if you’re a sole proprietor, plus your formation documents or DBA filing. Banks set their own lists.
2. Shop for the account. Compare monthly, transaction and minimum balance fees and any introductory offer. Ask about a business credit card and card processing if you’ll need them.
3. Run every business dollar through it. For most small businesses, the business checking account is the main record of what came in and went out.
4. Pick a way to keep the books. Software, a spreadsheet or a bookkeeper all work if they clearly show income and expenses.
5. Keep the receipts for 3 years in most cases, longer in the situations the IRS lists.
6. Set money aside for tax. Sole proprietors and partners, including most LLC members who haven’t elected corporate taxation, usually owe self-employment tax of 15.3% on net earnings of $400 or more, on top of income tax. If you expect to owe $1,000 or more, you’ll generally pay estimated tax four times a year. A CPA can tell you what applies.
7. Get a second pair of eyes. A bookkeeper or CPA can set up your categories, and the SBA’s partners offer free or low-cost counseling.

What you get back

A business account, a record of every transaction, and a rough tax set-aside. State taxes are in your state’s Get your tax IDs and Stay compliant steps.