How to determine whether you need a tax ID number.If you’re a sole proprietorship or an LLC with no employees, you don’t have to have a separate Tax ID number for your business. There are some benefits to getting a Tax ID number even if you don’t have to have one:
- Your business will need a Tax ID number to open a bank account or get a business credit card.
- It is also helpful to have a Tax ID number when you’re applying for business permits and licenses.
- If you’re signing contracts and getting paid by other people, they’ll need some identification number. If you don’t have a Tax ID number, you’ll probably have to share your social security number with the parties paying you.
- Having a Tax ID number will keep your personal money and business funds completely separate, which is a good thing for other legal reasons.
Do you have employees? Is your business as a corporation or a partnership? Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms? Do you want to save money in a Keogh or a 401k? Do you withhold taxes on income, other than wages, paid to a non-resident alien? Are you involved with any of the following types of organizations?
Getting a Tax ID number is easier than you think!Once you’ve figured out whether you need a Tax ID number, the process is pretty straightforward. Most people should feel comfortable doing this on their own. The best way to apply for a Tax ID number is to apply online – this is the preferred method. You can find the link in the button below. Once you start the application you’ll have 15 minutes to complete it. The application cannot be saved to come back to later. After you complete the application, you’ll get your new Tax ID number immediately! You should download and save everything, but you’ll also get a letter by email confirming the details.
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