Keeping separate accounts also has other benefits for freelancers and small business owners:
Organization. It makes it far easier to track
expenses and payments for your business if they’re not intermingled with
personal stuff like your credit card bills and that fro-yo you bought
at lunch. As Lauren Lyons Cole, CFP says, "Separate business and personal bank accounts and credit cards simplify record keeping.”
- Taxes. A lack of separation may cause more scrutiny with the IRS. In addition to the audit risk, there’s also the matter of delineating business expenses (and proving they really were for your business) if you want to claim them as deductions. “Keep them separate from the beginning—don't wait," says Cole.