Home » COMMENTARY » Wowser – A Tax Blog Throw Down – Why Keeping a Separate Business Checking Account Can Save Your Clients Money.

Wowser – A Tax Blog Throw Down – Why Keeping a Separate Business Checking Account Can Save Your Clients Money.

By Stacie Clifford Kitts, CPA

I must say, the business life of a tax accountant isn’t exactly a mardi gras. Moreover, it’s no wonder that we don’t see movies of the week about the accountant who couldn’t balance his or her ledger – borrrrring.

Therefore, I certainly look forward to the occasional lively debate, something stimulating and thought provoking, you know to spice it up a bit . But gees, I sure was stunned to read the comments made by June Walker over at her blog post There’s no shortage of bad advice out there. I suppose I don’t need to go into the details, since you can head over to her blog and read it yourself. But suffice it to say, she was a little miffed when a fellow blogger seamed to diss her blog post You Do Not Need A Business Checking Account.

But, hello, what do you expect to happen when you give that type of advice? Come on -you do not need a business checking account? What? Are you serious?

Regardless of all the important reasons to have a separate business account, you can check those out here at The Wondering Tax Pro’s blog, the extra cost that would be incurred by many clients to have an accountant or bookkeeper wade through business and personal expenses to pick out the proper deductions is not something I would readily advise to any client. And I know this from personal experience. Thank you.

I want my clients to focus on the important aspect of managing their businesses – you know – the revenue generating part, not the “Oh crap, I forgot to pull that business expense out of my co-mingled account” part.

So if you want to save your clients some frustration and some accounting fees, please advice them to open a separate banking account for their self-employed business.

In my opinion, advising a client NOT to open a separate business account would undoubtedly increase the accounting fees for those clients. So unless that is your intention, better stay away from that type of advice.


  1. JustJan says:

    Totally agree with your post.Clients who comingle biz and personal funds will pay more at tax time. Will likely miss real deductions and pay more tax. Will DEFINITELY pay more if they get audited for IRS representation.I help my clients establish a decent acctg system. I don't want to see the checkbook ledger. I want to see a general ledger when I do year end planning or prepare tax returns. Most IRS 1040 audits are Sched C related. Do you want the IRS going through all of your personal bank transactions whilst they determine if you overstated which ones were really for business?I don't expect clients to always take my advice, but there is NO good reason not to set up a separate account. If you tell me that an extra bank account is too much work, I am going to suggest that you might want to reconsider being self employed.

  2. Stacie Clifford Kitts says:

    ThanksIt just seems like a big fat – duh – I am at a loss to figure out why on earth someone would advice a client not to open a seperate business checking account.

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