I'm wondering at what point it becomes critical to open a separate business account and keep everything completely divided. Right now I'm mixing everything in my personal checking account since it's just me and my side hustle is pretty small. Is this going to bite me later with taxes or legal liability?
The IRS literally cannot tell what's personal vs business spending if it's all mixed in one account, which makes tax time a nightmare and audit risk way higher. Even a small side hustle should get its own checking account once you're making consistent money - it's cheap (most banks don't charge) and protects you if there's ever a legal issue, since it proves you run it as a real business rather than a hobby. Right now at the "pretty small" stage you're not in immediate danger, but the moment you're making a few hundred bucks a month regularly or taking on clients, separate it out. Mixing money gets messier the longer you wait and costs you more in accounting headaches later.
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