Can Having A Business Bank Account Simplify Your Taxes?
Things can easily get complicated when both personal and business finances are thrown into the tax mix, and without a small business bank account to keep them both separate, small business owners may suffer at the hands of the IRS.
With a small business bank account, you can not only keep your personal and business finances separate, but also keep better track of your business records, get limited liability protection and present clients and investors with a more professional, credibleapproach. Read on to discover more of the benefits business bank accounts are able to provide you with:
● Taxes that are more accurate
Accurate taxes are the only way to ensure that you’re not paying too much to the IRS, or paying too little, and with a business bank account, a distinction between your business and personal transactions helps you file your taxes with a higher degree of accuracy.
● A higher level of interest
When compared to a standard checking account, a business savings account can earn you a lot more interest, which over time, will help you to make the most of your cash flow.
● More purchasing power
By opening up a business credit card account, you have the freedom to make bigger purchases and establish a solid credit history.
● Prepared for any eventuality
Business bank accounts that offer a line of credit, enable you to purchase new equipment should you need to, for example, or help if you require money in an emergency.
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Simplified business expense deductions
Business expenses can be deducted from your businesses tax return, and with a business account statement to act as proof, you’ll find this much easier to do.
Do you have to open a business bank account?
No, sole proprietors, contractors, LLCs and freelancers aren’t required by law to open any kind of business bank account, but it can certainly be of benefit when tax season comes around (as it inevitably will!). With a business account to keep those finances separate from your personal finances, you can better identify capital expenditures, any expenses related to rent, costs associated with insurance and interest on business loans; this will make it considerably simpler to find deductions and file tax returns.
Additionally, if your business needs to establish a decent credit history or make an application for a credit line, having a business account is vital.
The different types of business bank accounts:
Below are some of the most common bank accounts for businesses:
● Business checking accounts – if your business writes a lot of checks, uses a debit card to withdraw money, or transfers and receives funds electronically, this type of account is ideal.
● Business savings account – if you need to save money for larger expenses like equipment, earn interest or set up a fund for emergency use, this type of account could be beneficial.
● Merchant services account
– to be able to accept debit and credit card payments from customers, a business merchant account is essential. With their own fee structures, be sure to do your research before signing up for one.
Taxes are undoubtedly made simpler when as a business owner, you open a business bank account, just be sure to talk your options over with an accounting professional and choose the right account for your specific needs.
At Heyer Inc, we proactively assist our individual and small business clients in meeting their goals. Our key area of focus is ensuring that our clients remain compliant with federal and state tax laws by providing them with high quality accounting and tax services Miami. If you are looking for an individual accountant in Miami, heyer inc would be a right option.