2

If having a Schedule C business and then starting a single member LLC (i.e. which the IRS views as a disregarded entity for tax purposes), should a separate bank account / expense tracking need to be opened for the LLC vs the Schedule C business if they are both engaged in the same activity by the same person?

Wondering if any implications on tax filing or on LLC protection implications or otherwise.

Improve this question
2
  • 1
    Purely for the sake of 'cleanliness' [ease of recordkeeping, etc.], I would say it is always 'recommended' to have separate bank accounts for business. Not an answer because I'm not sure what types of "implications" you are concerned with - it seems mostly you are concerned if this gets to the point of being a requirement.
    – Grade 'Eh' Bacon
    Jan 18, 2022 at 15:12
  • 1
    Two different companies should never share a bank account.
    – minou
    Jan 18, 2022 at 16:59

1 Answer 1

Reset to default
1

It's more of a legal question than a tax question. The IRS doesn't care about your bank accounts, it cares about your income (the R stands for Revenue).

In order to protect yourself from piercing the corporate veil of the LLC, you have to ensure to treat is as a completely separate legal (not tax) entity from yourself, and that includes having separate bank accounts.

You would probably want a proper legal advice from a lawyer.

Improve this answer

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .