A business bank account helps you manage your finances more effectively, keep personal and business funds separate, and maintain proper records. Follow these steps to open your business bank account efficiently.

This section is specifically tailored for individuals with self employed or 1099 income.

Step 1: Choose Your Banking Institution

Why: Using the same bank as your personal account can simplify transfers and management.

What to do:

  • Choose a bank you are familiar with, or compare different banks if needed.
  • We recommend using the same bank as your personal account for simplicity.

Step 2: Prepare the Necessary Documents

Why: Banks require certain documentation to open a business account, and having these ready will make the process smoother.

What to do:

  • Bring the following documents to your appointment:
  • Identification: A valid driver’s license, state issued ID, or passport for each person on the application.
  • Business formation documents: Articles of incorporation, meeting minutes, or other documents that establish your business.
  • Business tax ID number (EIN): A 9 digit number provided by the IRS. Sole proprietors without employees can technically use their SSN, but we recommend getting a free EIN from the IRS anyway so you are not handing your SSN to every client and bank.
  • Personal information: Social Security number and date of birth for each person on the application.
  • Business address and phone number: Ensure these are accurate and up to date.

Step 3: Schedule an Appointment or Open Online

Why: You can either visit the bank in person or open the account online, depending on the bank’s options.

What to do:

Schedule an appointment online to meet with a business banker, or check if the bank allows you to open the business account online for convenience.

Step 4: Obtain a Business Credit Card

Why: A business credit card will help keep business expenses separate and build business credit.

What to do:

Apply for a business credit card at the same time as opening your account to simplify the process.

Step 5: Redirect All Job Payments

Why: Keeping all business income in the business account ensures clear financial separation.

What to do:

Switch all job payments to be deposited into your new business bank account.

If you have formed an entity, the entity itself should be the party named in your independent contractor agreements, and payments should go to the entity's account. Tax law does not let you earn income personally and then assign it to your business after the fact; for the income to belong to the entity, the entity has to be the one contracted to provide the services.

Step 6: Keep Business Income and Expenses Separate

Why: Mixing personal and business funds can complicate your finances and make tax time more difficult.

What to do:

  • Use your business bank account for all business income and purchases.
  • Use your business credit card for business related expenses.