Hi,
I am just curious as to whether anyone opened up a business account for their piano teaching income or use a personal account. Are there any advantages to using a business account for a piano teacher?

Gisele

It mostly depends on your business model. If you're a sole proprietor, then a personal account is fine. If you're set up as an S Corp or something, then having a dedicated account can make the bookkeeping a lot easier.

In my case, as a sole proprietor, I opened a second personal account, sub-titled, 'music'

Business accounts usually attract higher fees and charges (at least here in Australia)

As someone who "does the books" for a living, I prefer separate accounts, with money moved from the business account to the personal one to cover personal expenses. It's much easier to total business expenses and fill out IRS forms that way. As R0B says, they can both be "personal" accounts by bank standards, and as Kreisler says, if one is a sole proprietor there's not a requirement for separate accounts. I just happen to find it a cleaner way to do things. Just me, though -

Cathy

I keep a separate checking account. Most banks want more money for commercial accounts, and as a micro-business, it's hardly worth it.

The IRS prefers you to have a seperate account. I do my banking at Fidelity, and additional accounts are no extra charge.

I have always had a business account. Like Cathy said it really makes the book keeping easier.

Having a separate account simply makes the accounting for your business easier and more accurate when it comes time to do your tax return (or financial statements, if you do them). Sometimes its not very convenient to carry around checks when you want to make a disbursement, so depending on your situation, a separate credit card could help with segregation, as well.

However, if you can easily identify all of your income and expenses associated with your business via your personal account when they're co-mingled, then you don't need one. Depending on your bank, these extra accounts may carry monthly or annual fees. Additionally, it doubles the adminstrative work in reconciling bank accounts.

Weigh the pros and cons of your particular situation, and decide what works best for you.