Step 7: Obtain a Tax ID
You’re starting a business! You have an amazing business plan, you’ve figured out who you will do business with and where your business will operate. You have mentors and some business training. You also have all your expenses and income ratios plotted for your big launch. Now that you’ve registered your business name, it is time to get all of your taxes squared away. Taxes can be daunting, but we are here to help! Let’s talk a little about taxes and getting your Federal Employee Identification Number (EIN).
According to the IRS website, you need an Employee Identification Number if you can say “yes” to any of the following questions:
- Do you have employees?
- Do you operate your business as a corporation or a partnership?
- Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
- Do you withhold taxes on income, other than wages, paid to a non-resident alien?
- Do you have a Keogh plan? (a type of tax-deferred pension for self-employed individuals)
If you answered “yes” to any of these questions, then you most likely need a federal EIN. In the state of Georgia you also need to file for a State EIN so that you can file state taxes. We will explore that topic in the Step 8, but for now you can work on getting your federal EIN.
Here is a list of websites that will help you acquire your Employee Identification Number. We suggest you take a look at the Frequently Asked Questions page before you apply so you have all the required information.
IRS Online Application: https://www.irs.gov/businesses/small-businesses-self-employed/how-to-apply-for-an-ein
We have obviously only scratched the surface, and this guide is not meant to be a tax law heavy. Thankfully the links above will have your head swimming in tax code. Do not forget to engage with your business mentors, or use this as motivation to seek a mentor (Jump to Step 2: Get Help). Also, don’t forget how fun this will be once you get all of the paperwork and the tax forms signed. You’re starting a business!!!