Starting a small business : Step 2 Obtain tax ID numbers
Last week we went over step 1 of starting a small business from the Small Business Administration checklist (you can find here). Today we are going over step two. Obtaining your businesses tax ID numbers.
Why are tax ID numbers important
Your tax ID number allows you to set up a business bank account, hire employees, set up a 401(k) or other retirement accounts, file sales tax returns, and many other things. Even if you are just running a Sole-Proprietorship you will need a tax ID number to do the all of the aforementioned items.
How do you get your tax ID numbers?
You will also need a state tax ID number. To do that you can normally visit their website and obtain on online. Here is a quick list of States that I know offer online business registration
Will you need any other tax ID numbers?
Depends on the state. Most states also require a different number for Unemployment Insurance but depending on how many employees you have you may or may not have to pay unemployment insurance.
Making sure you have all of the appropriate tax ID numbers is important and can be a hassle. To make sure you have all the appropriate ID number you should talk to a knowledgeable CPA or Accountant who has experience in your state.