Running a business
How to Separate Business and Personal Finances (and Get Your EIN)
Keep business and personal money apart: get a free EIN from the IRS, open a business bank account, set up payments, and pay yourself on a clear schedule.
Last reviewed October 20, 2026 · 6 min read
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Mixing business and personal money is one of the easiest habits to fall into. It makes bookkeeping and taxes harder. The SBA also says keeping funds separate offers limited personal liability protection.
What you'll need
Your formation documents (LLC or corporation) or DBA filing, if any
The responsible party's SSN or ITIN, for the EIN application
Your EIN (or SSN, if you're a sole proprietor and your bank allows it)
Ownership agreements, like an LLC operating agreement
Your business license, if your bank asks for it
How do I separate my finances, step by step?
Register your business. If you're forming an LLC or corporation, file with the California Secretary of State first. The IRS says to form your entity before you apply for an EIN.
Get your EIN. Apply on irs.gov. The IRS says it's free and, if approved, issued immediately online. You'll need the responsible party's SSN or ITIN. The IRS allows only 1 EIN per responsible party per day.
Open a business bank account. The SBA lists common account types: checking, savings, credit card, and merchant services (to accept card payments). Shop around, since fees vary by bank.
Use it for business only. Every business sale goes in. Every business expense comes out. No personal groceries on the business card.
Set up payments. Connect your payment processor or merchant account to the business account, not your personal one.
Pay yourself on purpose. Move money to your personal account on a set schedule, like every two weeks. Record each transfer. Ask your tax pro how to record it for your business type.
Set aside tax money. Put a share of each payment in a business savings account for quarterly estimated taxes.
When can I apply for an EIN online?
The IRS lists these hours for the online EIN tool (Eastern Time):
DayMonday to Friday
Hours (ET)6 a.m. to 1 a.m.
DaySaturday
Hours (ET)6 a.m. to 9 p.m.
DaySunday
Hours (ET)6 p.m. to midnight
| Day | Hours (ET) |
|---|---|
| Monday to Friday | 6 a.m. to 1 a.m. |
| Saturday | 6 a.m. to 9 p.m. |
| Sunday | 6 p.m. to midnight |
What should I compare when picking a bank?
The SBA suggests comparing:
For a checking or savings accountIntroductory offers
For a merchant services accountDiscount rate (percent per transaction)
For a checking or savings accountInterest rates
For a merchant services accountTransaction fees
For a checking or savings accountLine of credit rates
For a merchant services accountAddress Verification Service fees
For a checking or savings accountTransaction fees
For a merchant services accountDaily batch fees
For a checking or savings accountEarly termination fees
For a merchant services accountMonthly minimum fees
For a checking or savings accountMinimum balance fees
For a merchant services account
| For a checking or savings account | For a merchant services account |
|---|---|
| Introductory offers | Discount rate (percent per transaction) |
| Interest rates | Transaction fees |
| Line of credit rates | Address Verification Service fees |
| Transaction fees | Daily batch fees |
| Early termination fees | Monthly minimum fees |
| Minimum balance fees |
The SBA notes payment processing companies are a popular alternative to traditional merchant accounts. The fee types are similar.
Why does keeping money separate matter?
Cleaner books. The IRS expects records that clearly show business income and expenses.
Liability protection. The SBA says business banking offers limited personal liability protection by keeping funds separate.
Professionalism. Customers can pay your business by card or check made out to your business name.
Business credit. The SBA notes business credit cards can help establish a credit history for your business.
What it costs
ItemEIN from the IRS
CostFree
ItemBusiness checking
CostVaries by bank; compare monthly and transaction fees
ItemMerchant services or payment processor
CostPer-transaction fees vary by provider
| Item | Cost |
|---|---|
| EIN from the IRS | Free |
| Business checking | Varies by bank; compare monthly and transaction fees |
| Merchant services or payment processor | Per-transaction fees vary by provider |
How long it takes
TaskEIN online
TimeMinutes, during IRS online hours
TaskOpen a business bank account
TimeOften one visit or online session, once you have your documents
TaskSet up a payment processor
TimeVaries by provider
| Task | Time |
|---|---|
| EIN online | Minutes, during IRS online hours |
| Open a business bank account | Often one visit or online session, once you have your documents |
| Set up a payment processor | Varies by provider |
Getting set up for the first time? We'll go over the setup with you on a free Business Launch Audit.
This is general information, not legal or tax advice. Fees and rules change, so please check the linked official pages before you file or pay.
Questions people ask
Is an EIN free?
Yes. The IRS says you can get an EIN directly from the IRS online, in minutes, for free. If approved, it is issued immediately. You do not need to pay a third-party website.
Do I need an EIN to open a business bank account?
The SBA says you can open a business bank account once you have your federal EIN. It also notes sole proprietors can sometimes use a Social Security number instead. Check with your bank.
What documents do banks ask for?
The SBA lists the most common: an EIN (or SSN for a sole proprietor), your formation documents, ownership agreements, and a business license. Some banks ask for more, and a DBA filing helps if you use a business name.
When should I open a business bank account?
The SBA says to open one as soon as you start accepting or spending money as your business.
Can I get more than one EIN in a day?
No. The IRS says you can apply for only 1 EIN per responsible party per day.
We can go over the week with you and pick the change that gives you time back.
Book a Business Boost CallWords to know
EIN: Employer Identification Number. Your business's federal tax ID number, free from the IRS.
Responsible party: The person who owns or controls the business, named on the EIN application.
Merchant services: An account that lets you accept credit and debit card payments.
DBA: "Doing business as." A business name that is different from your legal name. In California the official term is fictitious business name.
Sole proprietor: One owner running a business with no separate legal entity.
Sources
- Get an Employer Identification Number - IRS · irs.gov
- Open a business bank account - U.S. Small Business Administration · sba.gov
- Recordkeeping - IRS · irs.gov
- Estimated taxes - IRS · irs.gov
This is general information for Sacramento and Northern California businesses. We are not attorneys or tax advisors, and this is not legal or tax advice. Check the official sources, and a local pro, before you act.