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  1. #1
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    Does s-corp need a tax id?

    We recently opened up S-corporation in New York. Since the products we sell(nutritional supplements) are not taxed in NY, and since the corporation itself won't be paying any taxes, do we even need to have a tax id? Is there some other way I can verify that its a legit corporation without giving a tax id number?

  2. #2
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    The EIN is used as an identifier throughout the corporate world, so I'm not sure why you wouldn't just get an EIN. I don't think that you are obligated to get one, but you'll soon run into roadblocks if you don't have one (i.e. payroll, paypal, direct deposit, bank accounts, credit cards, corporate credit, etc.).

    Also, just because you don't have to pay taxes (which is a gross overgeneralization) you still have to file. An s-corp is just a regular corp with an s status, and if you lose that S status you are paying taxes. I'm not sure if you can file a corporate return without an EIN, but why try?
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  3. #3
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    S-Corps dont file taxes because profit/loss are distributed to the shareholders in proportion of ownership interest, so each shareholder just reports it on his tax form. Hence I question the need for a tax id.

  4. #4
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    Quote Originally Posted by foozballking
    S-Corps dont file taxes because profit/loss are distributed to the shareholders in proportion of ownership interest, so each shareholder just reports it on his tax form. Hence I question the need for a tax id.
    I think you should be careful when you throw around facts like that. The corporate and tax laws are complicated. I can think of situations where an s-corp COULD pay taxes right off the top of my head:

    - If you violate your s-Corp status, you lose it and are taxed as an ordinary (c) corp. This happens all the time, to people who didn't do their homework.
    - If your corp lives in California, you pay 1.5% (varies) of your revenue before you pass-through even if you are filing subchapter S. I pay thousands of dollars every year in taxes FOR MY S-CORP.
    - An s-Corp still has to pay payroll taxes, FICA, etc.
    - Certain types of capital gains can be taxed even if owned by an s-corp
    - Certain types of stock transactions can result in net profit that cannot be passed through and can generate a tax liability

    You should probably do some research and learn more about what you are doing. There are loads of people who don't operate their corporations properly and wind up taking it hard from the IRS. If you aren't sure, look it up.
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  5. #5
    SitePoint Evangelist sysice's Avatar
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    As an S-Corp, I need to pay a yearly filing fee every year whether I make a $1 or a million. I would never get tax advice from a message board on the Internet.

    As for the original question, it depends. In New Jersey there are a couple official documents you can get to prove you are valid business entity, but almost all of them have the Tax ID, since that is most likely why anyone would need to validate you, is to report some transaction for tax purposes.

  6. #6
    Non-Member demosfen's Avatar
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    Is there a reason you don't want to get tax ID? I am also in NY, I think it cost me around $130 to get one
    I am aware that you mentioned that goods you are selling are not taxable in NY so I don't know how it applies here, but suppliers ask for tax ID to verify that it's a B2B transaction so that they don't have to charge you sales tax, not to verify that you are legit.

  7. #7
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    You paid for a tax it? Who did you pay? They are free from the IRS, aren't they?
    The fewer our wants, the nearer we resemble the gods. Socrates

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  8. #8
    Non-Member demosfen's Avatar
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    I was referring to sales tax ID, AKA resale certificate, not EIN. I am assuming that's what original poster was talking about since he mentioned his products are not taxed in NY

  9. #9
    SitePoint Addict soccerfriend's Avatar
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    it would be very valuable to know what type of tax id.. YOU NEED EIN (Employer Identification Number) if you have employees. You need STATE SALES TAX ID if you sell something in New York. EVEN IF YOU SELL ITEMS THAT ARE NOT TAXABLE IN THE STATE OF NY YOU MUST TO GET STATE SALES TAX ID BECAUSE AND YOU HAVE TO FILE IT SHOWING THAT YOU SALES REVENUES ARE EXEMPT FROM SALES TAX...

    Every corporation has its own corporate ID that you are given when incorporating that ID is used when you file your income taxes.. but in s-corp it all would be passed through to the partners K-1 on their individual returns..
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  10. #10
    Non-Member Waraas's Avatar
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    The s-corp does get taxed silly. The shareholders dont get taxed, everyone gets taxed

    What the s-corp does is just seperates the company from the owners. So the company gets taxed from state and fed. and the owners get taxed all the normal shizz.

    So how are you not going to pay taxes? If the company makes money, then the company pays taxes. and it dosent matter if its online or not

    BTW, dont get info from us, do to a lawyer

  11. #11
    SitePoint Wizard Lil_Red's Avatar
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    Quote Originally Posted by foozballking
    S-Corps dont file taxes because profit/loss are distributed to the shareholders in proportion of ownership interest, so each shareholder just reports it on his tax form. Hence I question the need for a tax id.
    I hate to disillusion you but S-corps do have to file taxes and even pay them.

  12. #12
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    An S-Corp has to file and claim how much money they made. When you file personal taxes, you have to declare the income from the S-Corp on Federal Tax Form 1120S Schedule K-1. The very first item (Part 1, Line A) is Corporations Employer Identification Number.


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