Question by bob123: is it a good idea to get a tax id if you are starting a online business by yourself?
I am going to be starting a online business by myself and was thinking about getting a tax id. What are the benefits that I can get out of it? I heard you dont have to pay tax for stuff? What kind of stuff can you buy and where can you buy it? I heard one of my brothers friend paid over 1700 for a tax id? Is it that expensive or is it free? Do you have to pay anything to get it?
Best answer:
Answer by jdkilp
First, it doesn’t cost anything to get. You can get a tax ID onlline or by calling …
http://www.irs.gov/businesses/small/article/0,,id=102767,00.html
It doesn’t help you in buying. It basically replaces your social security number for tax reporting (business vs. personal). Are there benefits? In some cases, yes. Once you have a federal tax ID, you can now set up a corporation (LLC, s-corporation, c-corporation). And, under certain circumstances there are tax advantages for this over a sole proprietorship.
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