Yes, you need a separate bank account for your business. I highly recommend having a bank account solely for depositing business earnings and paying business bills. This is separate from your personal bank account. Don’t pay personal expenses from your business bank account.
Then, I also recommend you track the income and expenses coming into and out of this account with a manual check register or excel worksheet or a simple to use software pacakge. If you are self employed and do not have your own corporation, then you absolutely don’t need a software system as complicated as Quickbooks. I am Quickbooks Certified and have been for over 15 years, love the system but it is complicated and not necessary for self employed or unincorporated businesses. There are many other simpler and cheaper options out there if you’d like to automate your recordkeeping. My other favorites are Quicken, Mint, Wave.
The IRS requires all businesses keep “adequate records”. You do need receipts for any expenses over $25. These records can be electronic such as a pdf or jpeg. On audit, if you don’t have receipts, your expenses as income tax deductions, may be denied.
You can take money out of your business bank account for personal use by transferring monies directly to your personal bank account or writing yourself a check. This is payong yourself or distributing your business profits.
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