LEARN ABOUT TAX ID(FEDERAL TAXPAYER IDENTIFICATION NUMBER) FOR YOUR HAIR BUSINESS

#What Is Tax ID?

Tax ID(Federal Taxpayer Identification Number) is an identifying number used for tax purposes in the United States and in other countries under the Common Reporting Standard. In the United States it is also known as a Tax Identification Number or Federal Taxpayer Identification Number. A Tax ID may be assigned by the Social Security Administration or by the Internal Revenue Service (IRS).

 

#Benefits of a Tax ID Number

Although sole proprietors and single-member limited liability companies are not obligated to obtain a federal tax number, many people choose to do so. Obtaining a federal tax number allows companies to establish a commercial credit history that is different from an individual’s personal credit history. Obtaining a federal tax number can also reduce the risk of identity theft. In addition, some business owners are more willing to provide customers and other businesses with a tax number, rather than their personal social security number.

 

Tax ID

#What Situation Needs to Use Tax ID?

Your business will use its tax ID number on many legal, accounting and administrative documents. You’ll need to provide a tax ID number in these situations:

  1. Submit your state and federal tax returns.
  2. Apply for a business license.
  3. Open a commercial bank account or apply for a commercial loan.
  4. Hire employees and submit payroll taxes.
  5. If the customer asks you to fill in W-9.

 

#How Can I get a Tax ID?

You can get a Tax ID by applying directly to the correct agency. For instance, you can get a Social Security number through the Social Security Administration. If you need an Individual Taxpayer Identification number or one for a business, you may be able to obtain one directly from the Internal Revenue Service.

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