Account type to isolate some transactions

[David Reiser]

On Dec 14, 2004, at 10:02 PM, Charles Gagnon wrote:

> Setting up a small homebased business that will not have it's own
> Bank accounts just yet. I would a way to isolate the cash, expenses
> and income accounts for this entity.
[big snip]

I went through a Self-Employment training program not too long ago. It 
included counseling at the Small Business Development Center, and a 
bunch of classroom time which included presentations by a lawyer, 
accountant, banker, debt counselor, etc. Every single one of them said, 
"never, never, never, NEVER run a business from the same bank accounts 
you use for your personal finances."

While diligent use of Gnucash might alleviate part of the concern, 
there still remains the possibility of malevolence from tax authority 
personnel. If there are ever any questions, they will assume you are 
lying to them. Do you want to keep absolutely every receipt you get 
from both personal and business transactions to prove your Gnucash 
story is valid? Do you want to reconcile every cash expense to close 
both your personal and business books?

Try to find a bank that has a good deal on small business accounts. In 
the Eastern U.S. at the moment, that's pretty easy -- no fees to speak 
of and no minimum balance at PNC. And Wachovia seems to be coming 
around too.

Dave