Do I need a Tax ID?
Has someone asked you for your tax ID number for your business? Are you panicking because you aren’t even sure what that is?! No worries. Today we’ll cover when you need one of these numbers to make your business more successful and compliant.
A federal tax ID, is also referred to as an employer identification number (EIN). It functions much like a social security number does for an individual. It’s a 9-digit number the government assigns to track your business, and ensures your transactions are not confused with other businesses with similar names. The most likely reasons you’ll be required to get one is if:
You’re a US business that wants to be an LLC (limited liability company) or a corporation. (Don’t worry, we’ll talk more about the types of businesses in another post.)
You have any employees that you’ll be paying (not counting yourself).
Even if it’s just you in your business, you may want to get one so you aren’t sharing your social security number with outsiders in order to get paid, or when applying for credit with vendors.
Remember, small business is a big thing. There’s a lot you can learn online, but if you need additional support The Friendly CFO, LLC is ready to help! Just click the “Let’s Get Started” button to connect with us.
