Keeping your business banking separate from your personal finances boosts the credibility of your business reduces your personal liability.
You want to have a separate account for business so you can build a financial history that you can later use to apply for credit and other products or services you may need to run your business. Finally, not having a separate account can make it too easy for companies to spend personal funds that may be needed for personal mortgage payments and other important household expenses.
One of the most common problems we see from startup founders that are first moving off from DIY accounting is a wide range of “personal transactions” being made with the business accounts. This is known as “commingling your books” and is a huge no-no as well as one of the most common ways businesses find themselves on the barrel end of an IRS or state audit.
According to the IRS, personal expenses are not eligible business expenses deductible against taxable income. Instead, if you were to purchase personal items through a company account, they should be fringe benefits that are subject to payroll taxes.