Being an entrepreneur and a business owner is fun and exhausting, but I wouldn’t trade it for anything in the world! It has been said that entrepreneurs often work 80 hours, so they don’t have to work 40 for someone else! How can you put a price on freedom though?
There are so many facets to owning your business, it is often easy to get lost in the fog and not set it up properly. Between choosing a name, setting up a structure, and deciding on branding and marketing materials, many people forget the one thing that is absolutely essential to form their business.
IT IS A TAX ID NUMBER!
After I Receive It, When Can I Use My Tax ID Number?
You have decided on what your business will be and the structure of your business. Now you are ready to register for your Federal tax ID number or EIN number. You can do this by completing an EIN application online. There are free filing services that have made the process extremely easy and completely painless, which may not be the case if you try it completely on your own.
Using Your EIN
Having an EIN number makes it a lot easier to conduct certain types of business for your company. Some of the most pertinent activities you can begin to work on with your EIN number is:
- Apply for a business line of credit
- Apply for a business line
- Submit applications for licenses and permits
- Open bank accounts for your business
- Create credit history for your business
- File proper taxes for your business
You can begin to set up these various entities and avenues as soon as you get your EIN number. You don’t have to wait. Being able to conduct various types of business with your tax-ID will help your business grow as it makes you look more official in the eyes of financial institutions and government entities.
EIN Over SSN
The reason you want to use your EIN number instead of your social security number is that you do not want your personal finances or personal business tied to your company. You want to separate the two so you can make clear assessments about what is happening with the success or failure of your business. It also helps to have an IRS-EIN-Tax-ID when actually filing taxes so you can use your SSN to file personal taxes and your EIN to file taxes for your business.
I hope this knowledge will help you in your business ventures!
What do you think is another vital step in forming a business most people forget about?