Use a Business Bank Account for Medical Transcription Work
A good financial recordkeeping system for your medical transcription work makes it easy for you to separate business and personal transactions. One of your first steps when you decide to become an IC should be to consider opening separate bank and credit card accounts that you use strictly for business expenses.
Your business credit card doesn’t need to be a fancy platinum card that comes with an annual fee. And it doesn’t have to be a card geared toward businesses. Any credit card will do.
You aren’t legally required to have separate bank and credit card accounts, but using dedicated accounts has a lot going for it:
Life is easier at tax time.
You won’t have to copy deposits and expenditures from your personal accounts to your business records.
If you’re going to use a business name (for example, Magnificent Medical Transcription), you’ll need a bank account under that name anyway.
Using separate accounts does have a few drawbacks:
You’ll have multiple accounts to reconcile. Thanks to modern bookkeeping software though, reconciling can usually be accomplished with just a few clicks.
Adding a separate bank account may bring extra bank fees. But if you shop around, you can find bank accounts with very few fees. A good place to start looking is with online banks like Ally and ING Direct.
You’ll have an additional bill to remember to pay on time.
You’ll have the extra step of transferring money from the business account to your personal account. If both accounts are at the same bank, though, you can do it online in a few seconds.
Business checking accounts tend to have higher fees. If you’re doing business under your own name and not a business name, you can open a second personal checking account instead of a business checking account and save on fees.