It is a universally acknowledged truth that with every new business comes mountains of paperwork. This is especially true around tax season when new businesses are filing state and federal taxes for the first time under a new sales tax number. Here is more about the sales tax number and its uses:
What is a Sales Tax Number?: The sales tax number is also known as an Employer Identification number, or EIN. The number consists of nine digits and will serve to identify your business entity in the eyes of the IRS. Once the EIN is assigned, you will need to keep that number in a secure location. Unless you change the nature of your business entity, your sales tax number will remain the same for every tax season.
Applying for a Sales Tax Number: To apply for an EIN you must fill out and submit form SS-4 to the IRS. You can submit the form online, which is the fastest and easiest way, or you can choose to fax or mail the document, which usually results in a longer waiting period. The form will take several weeks to be processed so you should apply as early as possible.
Sales Tax Number and State Taxes: While specific requirement vary, you will likely need to register your business. When you register your business with your state, you will also need to provide your EIN number Virginia, for instance, will also require you to register with Virginia Employment commission and will require a Certificate of Registration that allows you to collect sales tax once you register with your EIN. Other states may have additional requirements for your business.
While tax paperwork for a new business can seem overwhelming, you can now file most of the necessary forms online. Getting an early start will help ensure that you are less stressed this tax season.