How Do I Get a Tax Identification Number?
Burning question for those wanting to make money online by starging their own Internet home-based business.
How do I get a tax identification number? The answer is short and sweet. After you read the answer, please pay attention as I explain why this may not be necessary for you.
Here it is. The SBA (Small Business Association) says,
For a Federal Tax ID number, please contact the Internal Revenue Service for Form SS4. This Form is available through their web site at http://www.irs.gov/pub/irs-pdf/fss4.pdf. You may call the IRS at 1-800-829-1040 and ask for the Small Business Tax Kit #454.
Tax information for starting a business can be found by going to http://www.irs.gov/businesses/index.html. You will need to contact the Department of Revenue for state taxes (if any). Please consult your local telephone directory in the "State Government" section for the office in your state.
That last line about consulting your own Department of Revenue is pretty important if you are going to need a sale tax permit. I won’t go into this right now, but getting such a permit is free and generally very easy. In many cases, such as in my State, Iowa, you can get it online and be up and running in 15 minutes.
Why you may not need a Tax ID number. Generally speaking, a small home business that does not have employees will not need a Federal Tax ID. A sole proprietorship generally does not need an EIN, or Employer Identification Number. If you are going to incorporate, you may need an EIN, or Federal Tax ID. Most of us, operating as single or two person home, Internet businesses, will not need an EIN to start with.
Also, do not automatically buy the general advice about incorporating as an LLC. Although there is no harm in doing so, it may simply not be necessary. Just about all of the business advice I see out there for Internet marketers tells you to incorporate. Talk your plans over with an business attorney to figure out the best course of action for you. Starting a business, especially your own home Internet business, is not a case of one size fits all. Every situation is a little bit different. Please don’t let the self confessed Internet pundits tell you otherwise.
