Applying For A Federal Id Number?
Business By grossoutqueen Updated 29 Jul 2010 , 10:05am by Miag829
Im in the process of getting everything taken care of so I can legally back from my home.
My husband said he talked with the lady at his work that handles finances and stuff and she said I should not apply for a federal id number unless I am doing a lot of business.
If I am only doing a cake or so a week (or less) I shouldn't.
Do you have to apply for an ID number? Is there a limit of money you make that means you don't have to get one?
If you're a biz, you need an EIN. Just go to the IRS website and get one. It's all done online, instantly and there's no cost.
It's not how much money you make, it's the legal form of your business and how you do your taxes.
If you are doing business as a sole proprietor (and not through a separate legal entity) and you have no employees, then you can simply use your own social security number to open a bank account and to report your income and expenses, and you don't NEED a business EIN. But it's often a good idea to get one anyway, to help keep your business accounts separate from your personal ones, and as Leah says, it's easy and free to get one.
And you may want to get some advice (from a small business lawyer in your state) about protecting your personal assets in the event of a liability claim against you as a business owner.
The reasoning to get one has nothing to do with how much money you make. I've no idea where that woman got that idea.
Sounds like (what I refer to as) Kitchen Table Legal Experts.
Just get one.... it's hard to buy wholesale without one. Even doing a cake a week, you can still shop at wholesale sites.
There's a very small amount of money you can make before you have to pay self-employment taxes (well under $1000/year, as I recall). Ask a tax accountant. If you have sales tax in your state, you need to get a tax permit so you can collect and submit sales tax on your sales. Then your next stop is your insurance agent for business liability insurance. And, of course, the health department.
It's been said about a million times already on this site, if you want to be honest and protect yourself financially, set up the business legally. Being in business is like being pregnant. You can't be "sort of" pregnant, and you can't be "sort of" in business. You either are or you aren't.
The Small Business Administration has lots of resources. You may have SCORE volunteers in your area with business experience who will meet with you for free and help (http://www.score.org/index.html). They were invaluable to me when I set up my business.
I was under the impression that an EIN is also necessary if you have employees but optional if you don't.
If you don't have an EIN as a sole proprietor you just use your SSN. You can use that with wholesalers, too, and just have your seller's permit # handy (at least here in California).
Having worked for the tax dept it is not necessary if you do not have employees, sole prop or LLC with only one partner, etc. and yes, you can use your SSN for most wholesalers, but do you really want to hand out your SSN? I don't see what the big deal is, it takes 5 minutes to get it online and it's free.
Having worked for the tax dept it is not necessary if you do not have employees, sole prop or LLC with only one partner, etc. and yes, you can use your SSN for most wholesalers, but do you really want to hand out your SSN? I don't see what the big deal is, it takes 5 minutes to get it online and it's free.
I agree you do not need one, but why would you hand out your SS #? Its easy to get and very handy when buying wholesale.
Just stummbled across this post and want to say Thank you for all this valuable/helpful info. I have been trying to find out where and how to start all of this but have not had a clue where to start! Thanks again!
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