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Do I need a separate bank account for my LLC?

The short version: yes, open one. The IRS and the SBA both say to keep your business money apart from your personal money.

What the IRS says

One of the first things to do when you start a business is open a business checking account. Keep it separate from your personal checking account.

Source: IRS Publication 583, Starting a Business and Keeping Records, “Business checkbook.” irs.gov/publications/p583

Why it matters for your LLC

Keeping business funds separate from your personal funds is part of the limited personal liability protection a business bank account gives you.

Source: U.S. Small Business Administration, Open a business bank account. sba.gov

Why it matters at tax time

Good records show where your income comes from, which costs you can deduct, and back up what you report on your tax return. One account per business makes those records much easier to keep.

Source: IRS, Recordkeeping. irs.gov

What to do next

• Open one checking account for each LLC, in the LLC’s name.
• Put every business deposit into that account, and pay business costs from it.
• When you pay yourself, move the money from the business account to your personal account. Don’t pay personal bills straight from the business account.
• Ask your CPA or accountant how to record what you pay yourself. It depends on how your LLC is taxed.

We’re not tax professionals. Always ask your CPA or accountant before making tax decisions.