Bank Account?

[newtodaycare22]

I created an LLC and just got my tax EIN....so now I'm ready to start a bank account for the daycare. I have my personal accounts with Chevy Chase, so I may stay with them for simplicity, but I figured I'd ask. Anyone use a certain business checking account that you would strongly recommend? I'm venturing out to get it done tomorrow. Thanks!!

[tenderhearts]

I've always thought about doing the LLC but I don't quite understand it. So you have to open a business acct, then how do you "pay" yourself and such, and do you do 2 different taxes then?

[MarinaVanessa]

I have 2 seperate accounts (personal & a business) with BofA. I didn't do much research before so I'm not sure if there is a difference from bank to bank. I just went with them since I was already a customer. All I needed to do is use my debit card for the business at least once a statement cycle and it's also free. I think there's a maximum amount of checks and/or deposits you can make to a personal account until they start charging you an extra fee (may vary from bank to bank) and a business checking allows you to make more deposits. I think I needed $50 to open it but I don't need a certain minimum balance. It makes it soooo much easier for tax time. I just write checks or electronic checks to pay bills out of it and transfer money to my personal account (it's immediate) to "pay myself" when I need it.

At tax time I just take all of my personal and business paperwork with me at the same time and my tax consultant does them together.

[emosks]

We opened our business account at my credit union that I already have my own personal account, joint account with husband, car loan, and mortgage through.

I just transfer money to my personal and joint accounts each Monday and write a check to my business partner since she banks somewhere else.

When tax time comes around my husband gathers all of his LLC stuff (rental houses) and I gather my LLC stuff (daycare) as well as personal tax stuff and give it all to our accountant.

[My4SunshineGirlsNY]

Am I doing something wrong if I don't have a business account? I'm still new to this...my husband and I have a joint bank account and all our money goes in there because it takes both of our pay to pay the bills...I didn't want to hassle with depositing into a business acount only to have to transfer it over right away to pay our bills. So is this the wrong thing to do? Do I have to have a business account?

[tenderhearts]

I don't have a business account either, I deposit all in our joint account. I think from what I understand you only need seperate account if you're an LLC, right?

[ninosqueridos]

I wasn't able to get a free business account from B of A and I have personal checking accounts, credit card, and mortgage through them. I just use our personal checking account for the daycare deposits and I have one credit card that is separate for my daycare purchases which I keep all the receipts/statements for tax time. That way I can easily track the things I purchase that are just for the daycare....and my dcp's don't have a problem with making out their checks to my name (as opposed to the business). I have my EIN but I'm not LLC.

[Chickenhauler]

I've always thought about doing the LLC but I don't quite understand it. So you have to open a business acct, then how do you "pay" yourself and such, and do you do 2 different taxes then?

An LLC or corporation of any type is like a whole new person (in a sense). When you created that LLC, you created a new 'entity', with it's own tax return, bank accounts, IRS data, etc.

LLC's are a strange entity when it comes tax time, but the easiest and simplest way to deal with this is to treat your LLC just like an normal incorporation.

http://www.irs.gov/businesses/small/article/0,,id=98277,00.html

As for 'paying' yourself, you either set an hourly rate, percentage, share, or flat salary, and pay yourself just like if you were paying any other employee. Because that's what you are, an employee of the LLC. While you may also be the only stockholder, you are an employee.

Am I doing something wrong if I don't have a business account? I'm still new to this...my husband and I have a joint bank account and all our money goes in there because it takes both of our pay to pay the bills...I didn't want to hassle with depositing into a business acount only to have to transfer it over right away to pay our bills. So is this the wrong thing to do? Do I have to have a business account?

No, you do not have to have a business account. It makes things a little simpler come tax time (you only pay business bills out of the business account), but it's not required as long as you are operating as a sole proprietor (not incorporated).

I don't have a business account either, I deposit all in our joint account. I think from what I understand you only need seperate account if you're an LLC, right?

Or any other form of corporation.


As for whom to bank with, do your research and seek out every available option. Me, I've tried just about every bank in the area, and in the end, the institution that best fit my needs (I'm cheap) was my local small town credit union.

They don't charge fees unless you screw up and overdraft, their loan rates are reasonable, they're very helpful any time I call with a question, and they treat me like a person.

Oh, and I've never been charged a "teller fee" when I walk in and talk to a human being.

[Abigail]

If I do not have an LLC and just use my regular joint checking account, what do I need to do from the start for daycare?

I was thinking I would just purchase more, but less often...food, plan ahead and go weekly or bi-weekly to cut back on receipts needing to be held. Write a list of supplies I need right away....cups, plates, silverware, changing station/pad, age appriate toys, etc. and purchase those together as much as possible to cut back on receipts. Can we purchase from a thrift shop or rummage sale and ask for a receipt?--what needs to be included. (Do I need there name/address/price/items as proof come tax time or just skip second-hand purchase claiming?)

Thanks!

[Chickenhauler]

If I do not have an LLC and just use my regular joint checking account, what do I need to do from the start for daycare?

I was thinking I would just purchase more, but less often...food, plan ahead and go weekly or bi-weekly to cut back on receipts needing to be held. Write a list of supplies I need right away....cups, plates, silverware, changing station/pad, age appriate toys, etc. and purchase those together as much as possible to cut back on receipts. Can we purchase from a thrift shop or rummage sale and ask for a receipt?--what needs to be included. (Do I need there name/address/price/items as proof come tax time or just skip second-hand purchase claiming?)

Thanks!

Just keep your rcpts, I find it easiest to highlight business related purchases ASAP (sometimes the description on the rcpt defies logic, and 6 months later you're going HUH?)

As for second hand stuff, if they won't write a rcpt, just jot it down in a notebook and include all info possible-date, location, amount spent, what you bought, etc.