Can I run a business without a Tax ID?
Each type of business has some tax responsibilities, but its ways depend on the kind of business. To pay taxes, in some cases, a tax ID number may not be required.
For example, if you have a sole proprietorship or LLC without employees, there is no need to have a tax ID. In both situations, the business owner may use a Social Security Number instead of a Tax ID – EIN.
Corporations, partnerships, trusts, estates are all needed to obtain an EIN or tax ID. As we have already mentioned in our previous articles, this number is given by the Internal Revenue Service (IRS) and used to tax requirements.
Even if there is no need to have it in some cases, it has some advantages to get it.
An EIN which consists of a nine-digit number acting as Social Security Number identifies your business within the IRS and can be used for opening a bank account or selling credit from banks on behalf of your company.
Why am I in need to get a Tax ID?
An EIN and TIN are different from each other. EIN is a type of TIN. If you are planning to start a business, it is okay to have it. Even if it is not mandatory, it has some advantages.
Do I have to get a Tax ID for a company?
Of course, if you are matching with the following criteria:
As the sole proprietor, a bankruptcy proceeding will affect you directly, and you are subject to it. It is better for you to get that number.
Corporation, LLC, Trust, Partnership and so on… You may have a look at which types of business need that number. However, in any case, it has some advantages. It is better to have it. To make your business legal and official, it is mandatory to have it, and it is the first step.
You can get a new EIN by submitting an SS4 form by fax, and it will take roughly four business days. However, if you don’t have that much time, you may apply for it online.