Do I Need a Tax ID Number?

Do I have to get a federal tax ID number for my home-based virtual secretarial services business?


The government requires you to identify your business with one of two numbers: either your Social Security number or an EIN (employee identification number). If you are running a home-based business by yourself and don't have any employees, your Social Security number can be used on all your government forms and other official documents. However, you can still apply for an EIN and use that number instead.

To apply, talk to your local IRS office and ask for Form SS-4. If you do not have any employees working for you, be sure to indicate that on the form by writing ''FOR IDENTIFICATION PURPOSES ONLY'' across the top of the form. You can get information on EIN forms and other tax regulations for businesses at the IRS Website.

When might you use your EIN? Tax resale certificates and some other business forms require this number. So if you intend to charge tax on any products or services you sell, you will need to get an EIN. As a virtual assistant, chances are you won't be charging tax. However, certain service-oriented businesses are subject to sales tax in certain states. It pays to check with your state taxation office to find out about the latest rulings in your area.

Another important document to file is a Fictitious Name Statement, also known as a d/b/a (doing business as) form. This lets everyone know that you and your business are one and the same, even if you have different names. Say you call your business An Extra Pair of Hands, for example. Your d/b/a will verify that Donna Miller is the individual responsible for An Extra Pair of Hands whenever any financial, legal or other ''official'' dealings take place. This form is usually filed with the county clerk's office and costs about $50 to file, depending on where you live.

Is there any other paperwork you need to take care of when you're first starting out? Again, the answer varies from one locale to another and depends on what kind of business you're running. You may be required to get a town, city, or state permit or license, even if you are working from home. The best course of action is to check with other home-based business owners in your area and your local and state government offices to find out what must be filed.

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