How to Start a Photography Business: Opening a Business Bank Account
When starting a business, it’s important to keep your personal finances and business finances separate through different bank accounts.
*Note: I am not a lawyer or accountant. I’m only speaking from personal experience and what I learned in college business courses. Please consult a professional.
Why do you need a business bank account?
#1 Keeping your business expenses and income separate from your personal expenses and income makes keeping your books much easier.
#2 If the IRS decides to audit you to determine whether you’re running your business as an actual business or as a hobby, one of the first things they’ll look at is how you manage your business finances. If they determine that your business is run like a hobby, then you’ll only be limited on what you can deduct come tax season. This isn’t good if your business expenses exceed your profits (which is not uncommon for the first year or two of running a business).
What do you need to open a business bank account?
To open a business bank account, you’ll need your Articles of Incorporation (which you’ll get when you register your business with your Secretary of State), your EIN number, and personal information such as your driver’s license number, SSN, or other identifying information (these can vary per bank).
Novo: An Online Business Bank Account
If you want an online bank that’s super easy to sign up for and has no fees, check out Novo. I’ve used Novo for a few years and couldn’t be happier with their customer service and security. They have the option for virtual cards along with physical cards, linking up to multiple bank accounts so you can directly pay yourself, and the option to put funds in “Reserves” where they’re held until you release them for a certain transaction (such as federal taxes).
