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?
Answer by jdkilp
First, it doesn’t cost anything to get. You can get a tax ID onlline or by calling …
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.
Know better? Leave your own answer in the comments!