Getting a Tax ID in the States

[RKuhle]

I need to get a tax ID for my business so I can stop using my SSN. How do I go about getting one? From what I understand, tax ID's are on the federal level so the ID should work in any state (I'm moving this month).

Can anyone give me some pointers or good resources for finding more information?

[moospot]

http://www.irs.ustreas.gov/prod/tax_...tax/tc755.html

I just found this out the other day. You need to fill out the SS4 form. You can apply by phone and email in the form so you can use your ID immediately.

[Steelsun]

Yep, The SS4 is the right one. You may get them saying that since you are a sole proprietor (not a corporation), and don't have any employees, you don't need one so they won't issue you one. Don't take that, and say you want one as you plan on hiring an employee soon.

Want to hire me?
(say yes)
Sorry, I don't want the job.
There, you tried to hire an employee, but have not yet. So you are not lying to Unkie $am.

Also, check with whatever state you move to, you might need to also register with that state (like for sales tax, etc).

[beley]

If you're careful you can avoid paying any sales tax on anything but physical equipment or software. As long as you bill HOURLY as a SERVICE you don't have to charge sales tax. Also, hosting and other monthly subscriptions and fees don't have to be billed sales tax.

You will need a business license in your local town/city if you have a certain volume of sales though. The cost ranges from $50 to $500 depending on where you live. They wanted me to pay $500 b/c I was working out of my home so I just gave them the address of my other business in our Ind. Park...

[Timothy]

I know that in West Virginia (in the USA), I was still required to have a "sales tax payment book" and send in the payment coupons with $0 written on them just so it was on file even though I own perform services that are not taxable. Check with your local and state government though because they all seem to have different rules and require/suggest different things.

I think it also helps if you can afford it to get a CPA just for little things like this and whenever you have a question about taxes or finances in general. I know my accountant sure has saved me alot of time and frustration.

[Steelsun]

Originally posted by beley
If you're careful you can avoid paying any sales tax on anything but physical equipment or software. As long as you bill HOURLY as a SERVICE you don't have to charge sales tax. Also, hosting and other monthly subscriptions and fees don't have to be billed sales tax.

Sorry, but you are WRONG!
Sales Tax rules are entirely dependant upon which state you live in.

For example, in Texas, certain services ARE taxed.
For example: Web Design & Hosting is taxable.
ISP/Connectivity is not taxed for the first $25 per month, but is taxed after that.
Lawyers don't charge tax, but legal researchers have to.

Tax rules vary so much, even CPA's have a hard time, but you still should consult one.

[beley]

Well, everyone's wrong once or twice huh!

I would definately advise you to consult a CPA on anything that you're doing... We have one and I don't know what I'd do without him!! They can be the best investment you ever make (especially considering they can usually find you a lot more money on your tax return!)

Anyway, two things everyone should have if they own a business are a CPA and an attorney. You don't have to use them often, but when you need professional advice, there's nothing better than a professional!

[Steelsun]

I agree 100%.
It's better to pay a little to use a CPA and an attorney now, then to have to hire them later and pay alot to fix the problems.

[Timothy]

Originally posted by Steelsun
I agree 100%.
It's better to pay a little to use a CPA and an attorney now, then to have to hire them later and pay alot to fix the problems.

I agree. I know when I have my CPA handle things, I don't worry about them being wrong. I know if I tried to do some of my tax-related stuff myself, I would worry about missing that one little thing that's so important. With a CPA, I know that everything is being done correctly and there's not as much to worry about.

[atomicmunky]

just so you know, you're going to need a business certificate to be able to open a business checking account. i found that out the hard way.

so ... emplyer ID number (same as tax ID #) which is a federal thing and a business certificate which is a town/state thing.

good luck !

[RKuhle]

Originally posted by atomicmunky
just so you know, you're going to need a business certificate to be able to open a business checking account. i found that out the hard way.

This must be state dependent. When I got my business checking account (February 2000) I simply strolled into the bank and set one up, no licensing or certificates required. This was in Iowa, but I'm guessing in California (where I'm moving) I'll need some sort of certificate or license.

[Steelsun]

Yes, every State, County, & Town/City operate to their own drummers. You can live on one side of street that's in a particular town and need differant stuff done than the guy who lives accross the street and is not considered to be in a town.

Best places to check and see what needs to be done in your new location:
City Hall (good luck) and with them the County Seat (courthouse)
Small Business Administration (they are very helpful)
local Chamber of Commerce
Better Business Bureau
and while your at it, try the Rotary Club. Most of their members are local biz-men that know what to do and they like to help out the new guys.

[Steelsun]

Oh, and I forgot to mention: California requires more permits, licenses, forms, etc than almost any other place in the US. The big cities there (San Fran and surroundings, LA and Surroundings, San Diego & Sacramento) are the worst of the lot.
Good luck and don't let the system get you down.

[RKuhle]

I figured so, Cali loves those rules. Looks like I'll be going through paperwork hell.