I have my own company doing contracted work for other companies. In order to claim deductions, do I need to set up a business account for my business expenses or can I just use my personal account and itemize the expenses that were for work? Do I have to set up a sole proprietorship, LLC, etc or can I just operate as myself? Would I need to present myself as John Smith DBA Independent Contracting Company Name?

ANSWER

The BIDaWIZ Team's Answer:

You really should setup a separate business account as accounting for the transactions will be much easier. In addition, your record-keeping will provide a clear audit trail should you ever be subject to an audit. You can setup as a sole proprietorship and apply for an EIN here -> http://www.irs.gov/instructions/iss4/ch01.html If you'd like to setup as an LLC, that will provide greater protections from creditors and for your personal assets. You can setup a DBA for greater distinction between your business and personal matters.