Hooray! A check from a client came in. Now what? Do you stick it in your personal bank account where it mingles with your part-time job income and your spouse’s direct deposit? If so, you might be making your life needlessly harder when it comes to keeping your freelancer finances straight. A couple of weeks ago I wrote about all the fine tax deductions freelancers like you and me get to take at tax time. But be warned, those nifty little deductions can get lost among payments to the grocery store, the vet, and Uncle Hal’s Hardware and Bait Shop. And don’t get me started on visits to the office supply store. When you’re doing your taxes a year later, it’s impossible to remember whether that September 1^st trip to Staples was to buy your printer cartridges or your munchkin’s school supplies.

The obvious solution to this headache? A second bank account, devoted solely to your freelancing income. But not so fast, there are pros and cons to opening a second bank account solely for your freelancing income.

Just Do It: Two Bank Accounts are Better than One

The biggest advantage of a business account is peace of mind at tax time. Deposit all of your income into the account, pay all of your expenses out of the account, and your neat and orderly bank statements are your accountant’s dream at the end of the year. There’s no need to worry about accidentally deducting a personal expense and ending up with egg on your face (and no eggs in your fridge) in case of an audit. And there’s no chance of you forgetting a tax deduction because a business expenses got mixed in with your household purchases.

If you want to keep your financial life neat, simple, and uncomplicated. Then opening a second checking account for your freelancing income and expenses may be for you.

Don’t Do It: Commingle Those Funds

Have you deposited a paper check lately? Then you know that you sometimes have to wait a day or more for newly deposited funds to become available. I think we all remember the days of waiting impatiently for a check to clear. If you open a business bank account, you might put yourself through this irritation twice – once when the check clears in your business account, then once when transferring your funds from your business account to your personal account. Not to mention, many banks charge fees for everything. When opening a second bank account, you may end up nickel and diming yourself out of your profits.

Besides, who wants to balance two checking accounts at the end of the month? Some tax pros, like June Walker the well-known accountant to indies, say Schedule C-ers (us unincorporated folks) have no need of a separate bank account as long as we keep our financial house in order. June gives the example of a freelancer buying groceries. Some of the food is for the family, while some is for a client who’s coming to dinner. The ingredients used in client’s risotto are tax deductible, while the munchkins’ Teddy Grams are not. Does she pay with her business account or her personal account? (Or does she drive the clerk nuts by separating her groceries into piles?) A simple visit to the grocery store becomes a hair-tearing experience when a freelancer tries to use two accounts.

If you feel confident that you can keep track of your freelancing income and expenses, then you may not need to bother with a dedicated bank account for your business.

A final note: If you are incorporated and commingle your business and personal funds, you could be in big trouble come lawsuit or audit time. Check with your accountant about your options as an S-Corp, LLC or other incorporated entity.

Jennifer Escalona is not an accountant, nor does she play one on TV. Be sure to consult your financial pro before making important financial decisions about your business.