EIN, bank account, books: the plumbing under the business
In one paragraph
Before the first invoice: a free EIN from the IRS in minutes (never pay a website for one), a business bank account in the exact CSLB name, a card that touches nothing personal, and a bookkeeping habit that tracks every dollar to a job. The books are what turn an estimate into a price you can trust, what the CDTFA and FTB will ask for, and what makes the quarterly estimate a number instead of a guess.
The rule
The IRS issues an employer identification number online, immediately and for free; you never have to pay a fee for an EIN (IRS). A sole proprietor with $400 or more of net self-employment earnings files Schedule C and Schedule SE (IRS). Contractors must keep records that support every purchase, sale and nontaxable transaction they report (CDTFA).
Why it matters
A contractor who cannot say what last month's jobs actually cost cannot price next month's, cannot answer a CDTFA question about which purchases were materials and which were fixtures, and pays the April tax bill out of the truck fund. Mixing personal and business money also undercuts the liability protection an entity was supposed to give.