Interesting question that came in from Perrilee:

Q: Is there a tax advantage to opening a business bank account over a personal account? I keep hearing to open a business account, WHY? Thanks Tom

A: You only need a business bank account if you have a business. Any business entity MUST have its own bank account. All income earned by that entity should be deposited to the entity’s bank account and all expenses of the business should be paid out of the entity’s bank account. If you have a sole proprietorship (no entity), then you still should have a bank account set up solely for the business. This makes things much easier for the tax return and also for an IRS audit to prove that you really have a business.

Of course, the real question is whether you should have a business. The answer is “YES!” Businesses get lots of tax benefits and can provide tremendous cash flow. If you want to learn how to run a business and how to become an entrepreneur, look for the new Global Entrepreneurs Organization (GEO) coming out of Rich Dad later this spring. I am heading up this new initiative and is will be outstanding. Finally, hands-on training for entrepreneurs. And, you can make money while you train.

Warmest regards,

Tom