How to Open a Bank Account for a Home-Based Business

Keep a close eye on your business account.

No matter how small your home-based business, it is a good idea to have a separate bank account. The IRS considers the income you make from your business to be taxable, but you can write off any expenses you incur against those earnings. Having a separate bank account for your business makes it much easier to track those expenses.

Instructions

1. Contact the bank where you want to open the account and ask what type of documentation is needed for a business checking or savings account. The requirements can vary.

2. Gather documentation about your business, including your employer identification number (EIN), if you have one. If you run your business as a sole proprietor, you can open the account with your Social Security number. If your business is incorporated you can use your EIN. You may also need a business license to open an account.

3. Visit your local branch and let the manager know you wish to open a bank account for your business. Provide complete identification, including phone numbers, addresses and Social Security numbers, for all authorized users of the account. You may be able to open the account online, but you must still provide this information.

4. Fund your new account, either onilne through a transfer from another account, or by writing a check. Keep copies of all the paperwork used to open your account.

5. Complete a signature card for the account, and have anyone else with signing authority do the same. Submit completed signature cards to the bank representative.

Tips & Warnings

• Keep your personal and business transactions separate. Do not commingle your personal and business expenses. Use the business checking or savings account strictly for business.

References

• Chase Bank: Business Bank Account Requirements
• Entrepreneur Magazine; "Keep Your Busines and Personal Finances Separate"; Karin Price Mueller; February 1, 2010