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Do you need a Tax ID Number?

Date: 05/22/2007 | Category: Business | Author: developers

Many new business owners start out as sole proporietors and are often confused as to whether or not they need to obtain a federal employer tax identification number (EIN) for their business.   The answer depends on whether or not you plan on hiring employees.  If you are going to have employees, you need one.  If you don’t expect to hire employees, you do not.

The income and expenses for your business are reported on Schedule C, Profit or Loss from Business, which you attach to your personal income tax return.  If you don’t use a EIN, the tax identification number on Schedule C will be your SSN.

If you hire employees down the road, you can easily get an EIN by completing IRS Form SS-4, Application for Employer Identification Number or by calling the IRS at 800-829-4933.  There is no cost for obtaining an EIN.