The very quick answer is, that no, you don't NEED a separate bank account or credit card for your freelance work.

Remember, if you're earning untaxed income for the things that you do, then you're a business. You don't have to have separate accounts, or have an LLC or S-Corp, or anything else.

Why Do People Get Them?

There are a few reasons people might want to have separate accounts for their freelance earnings and expenses:

  1. It makes tracking your income and expenses MUCH easier, especially if you use bookkeeping software that can automatically track the activity in these accounts so you can easily categorize what's coming in and out
  2. It creates a clear boundary between you the person and your business, which is particularly useful in upholding the liability protections that come with a structure like an LLC
  3. And some people just find it's easier because then they know how much money belongs to the business and how much money belongs to them, when it comes to figuring out how much they have available to spend.
  4. If you've got partners or other people involved in your business, it starts to become necessary to separate personal money from business money.

How to Get Them?

If you don't have an LLC or other formalized business structure, most banks and financial institutions will require you to have a DBA (that stands for "Doing Business As" and lets you create a company name that you can use instead of your own name).

To get a DBA (only needed if you don't have an LLC or other formalized business structure):

  • usually you'll need to start by applying for an EIN (having an "Employer Identification Number" means you can use that instead of your social security number when you send out W-9 forms to clients)
  • then you'll apply to your state for a DBA, it usually costs some money (less than $100), but is often cheaper and easier than setting up an LLC

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