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Richard, Attorney
Category: Legal
Satisfied Customers: 55144
Experience:  Attorney with 29 years of experience.
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My son is starting his own lawn care business. Does he need

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My son is starting his own lawn care business. Does he need to have a checking account in the name of his business, or would it be okay to continue using his personal account - I am thinking in terms of tax purposes. He has no one working with him.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good morning. Is this business going to be a sole proprietorship? Or, is he going to form a limited liability entity? Thanks.
Customer: replied 3 years ago.

sole proprietorship

Thank you. As a sole proprietorship, it is not absolutely necessary to have a separate bank account, but it is highly recommended for just the reason you suggest. When he prepares a tax return for this business, he will report the activities of the business on Schedule C. It will be helpful in preparing his return and very important should he get audited to have a separate and distinct paper trail of what sources and uses of money are related to his business and what sources and uses are not. If he has a separate account into which he deposits all his income and pays all his bills, it will be a much easier route for him in any audit.

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