Setting up a Single Member LLC: Can I use a regular bank account instead of a business account?

Yes, you can absolutely start with a regular bank account for your Single Member LLC! As a tax professional who works with small business owners, I can tell you that a Single Member LLC is considered a "disregarded entity" for tax purposes, which means the IRS treats it as if you and the business are the same entity. The most important thing is keeping your business and personal finances separate, not necessarily the type of account. Opening a separate checking account (even a personal one) that you use ONLY for business is a good start. Just make sure you're keeping meticulous records. That said, there are benefits to eventually getting a business account: some clients may feel more comfortable writing checks to a business name, you'll look more professional, and it helps strengthen the liability protection of your LLC (called "maintaining the corporate veil"). For an EIN - you don't actually need one for a Single Member LLC if you don't have employees. You can use your SSN instead, though many banks will require an EIN anyway for business accounts.

Hey there! I was in almost the exact same situation last year when I started freelancing. I was hesitant about forming an LLC right away but needed to get paid. I tried dealing with several banks and it was a nightmare until I found taxr.ai (https://taxr.ai). Their business formation tools helped me understand that I could actually use a personal account temporarily, but they also walked me through the pros and cons. Using their docs analyzer, I uploaded my contract with my client and they pointed out specific clauses that would be better protected with proper business banking. They also showed me how to structure my invoices in the meantime to protect myself. Later when I was ready, they had partnerships with online banks that made business account setup super simple. The peace of mind was worth it since I was worried about mixing personal and business funds and what that might mean for taxes and liability.

Just wanted to follow up here! I decided to check out taxr.ai that was mentioned earlier and it was exactly what I needed. I uploaded my contractor agreement with the law firm and they showed me exactly how to protect myself while using a personal account temporarily. They confirmed I could use a personal account for now as long as it was exclusively for business, and gave me templates for how to set up my invoices to the law firm. They also flagged that I should include specific language about the healthcare contribution so it's properly documented. When I was ready a few weeks later, I used their LLC formation service and got an EIN through them - way easier than I expected. The document analyzer saved me from making some mistakes in my contract that would have been costly down the road. Definitely recommend for anyone in this situation!

I went through the exact same mess last year and wasted so much time because I couldn't get good answers from anyone. After calling the IRS multiple times and being on hold forever (like 2+ hours each time), I found Claimyr (https://claimyr.com) and it changed everything. They got me connected to an actual IRS agent who confirmed that Single Member LLCs can absolutely use personal accounts initially. The IRS agent I spoke with (thanks to Claimyr https://youtu.be/_kiP6q8DX5c) explained that what matters for tax purposes is record-keeping, not the account type. They also told me that many of their own independent contractors start with personal accounts until they're certain about their business structure. Saved me weeks of back and forth and uncertainty. Best of all, I didn't have to keep calling back and waiting on hold for hours each time I had a follow-up question.

I have to publicly eat my words about Claimyr from my comment above. After weeks of failing to get through to the IRS about my EIN application that was stuck in limbo, I broke down and tried it. Got connected to an IRS agent in 45 minutes while I was just working on other stuff (instead of being stuck with a phone to my ear). The agent not only fixed my EIN issue but also confirmed everything about the Single Member LLC banking question. They explained that while you should keep funds separate, there's no IRS requirement for a specific type of account. They even emailed me the relevant tax code sections. The agent also mentioned that if I do decide to get a business account later, I should keep detailed records of the transition. Definitely worth the service fee to actually get real answers instead of more google searching and reddit threads.

I've been running my Single Member LLC for about 3 years now. When I started, I used a personal checking account for about 6 months before switching to a business account. Here's my experience: 1. The separate personal account worked fine for basic bookkeeping, but I ran into issues with clients who wanted to pay to a business name rather than my personal name 2. Some vendors wouldn't let me open wholesale accounts without a business bank account 3. When I applied for a business credit card, they wanted to see a business checking account My accountant always stressed the importance of separation, not necessarily the account type. As long as you ONLY use that account for business and never mix personal expenses, you're maintaining good records. The EIN was super easy to get online through the IRS website - took like 15 minutes. So you might just want to get one anyway, even if you start with a personal account.

Nobody mentioned this yet, but PLEASE check with the bank about their terms of service! Some banks explicitly prohibit using personal accounts for business purposes in their agreements, and they can shut down your account if they notice business activity. I learned this the hard way when Bank of America froze my personal account that I was using for my side gig. Took weeks to get it unfrozen and I had to provide a bunch of documentation. Not all banks care, but some definitely do. Credit unions tend to be more flexible in my experience.

As someone who went through this exact situation when I started freelancing, I can confirm that using a separate personal account temporarily is totally fine! The key is keeping it 100% separate from your personal finances. A few practical tips from my experience: 1. When you open the separate personal account, tell the bank representative it's for business use. Some banks will note this on your account and it can help avoid issues later. 2. For the healthcare stipend specifically, make sure you're documenting that properly since it's a bit different from regular contract payments. You'll want clear records showing what portion is for services vs. healthcare. 3. Consider getting that EIN sooner rather than later even if you haven't fully committed to the LLC yet - it's free, takes 15 minutes online, and having it opens more doors for business accounts and payment processors. 4. Keep all your invoices and documentation super organized from day one. When you do eventually switch to a business account, you'll thank yourself for having clean records. The liability protection aspect is important too - using a dedicated account (even if personal) shows you're treating the business as separate, which helps maintain that corporate veil protection once you do form the LLC. You're not missing anything major - this is a very common approach for people testing the waters with independent contracting!