<\/span><\/h3>\n\n\n\nYou\u2019ll put the last piece of foundation in place when you create a business bank account for your LLC. <\/p>\n\n\n\n
A lot of small business owners skip this step, but it\u2019s important. Many people think that using their personal bank account for both business and personal transactions is easier and more convenient because they\u2019re using one account for two things. But I\u2019ll explain two very good reasons why you shouldn\u2019t do this. <\/p>\n\n\n\n
The first is that people assume they\u2019ll be able to tell the difference between business and personal transactions for federal tax purposes. However, these purchases are often made long before you have to pay federal taxes and, unfortunately, it\u2019s harder to remember things with the passage of time. It\u2019s a lot easier to tell the difference between transaction types for tax purposes if you have an account dedicated to business transactions.<\/p>\n\n\n\n
The second reason is that when you run business transactions through your personal bank account, you become vulnerable to lawsuits and your personal information is no longer protected even though you enjoy a degree of privacy protection when you form an LLC. The assets in your bank account aren\u2019t protected when you use your personal bank account for business transactions either. <\/p>\n\n\n\n
So, if you want to make annual tax filing easier and maintain your asset and identity protection, you should open a business bank account for your LLC. <\/p>\n\n\n\n
You\u2019ll need to create what is known as a \u201cbank kit\u201d to open an LLC bank account. A bank kit contains copies of many of the formation documents I\u2019ve previously listed, like your Certificate of Formation, Operating Agreement, EIN, and initial resolution. <\/p>\n\n\n\n
Rather than gathering up all these documents yourself, an LLC formation service will typically collate them for you and create the bank kit as part of their services, which takes a lot of the guesswork out of bank kit creation. <\/p>\n\n\n\n