What’s the tax advantages of using a tax ID number instead of my social for my business?
April 4, 2009
dreamfactoryent asked:
I have a home based business that uses my social security number to file taxes. I understand the benefits when filing this way. I am considering getting a Federal ID or tax id number for my business. Would I still use a schedule C when filing? What are the pros and cons of filing this way? Thanks!
I have a home based business that uses my social security number to file taxes. I understand the benefits when filing this way. I am considering getting a Federal ID or tax id number for my business. Would I still use a schedule C when filing? What are the pros and cons of filing this way? Thanks!
One Response to “What’s the tax advantages of using a tax ID number instead of my social for my business?”
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April 7th, 2009 at 10:32 pm
I really don’t see any cons to obtaining a FEIN, other than having to fill out the SS-4 to obtain it.
Some of the advantages are if you ever need to obtain any financing or fill out any paperwork in the future, your SSN will not be displayed on documentation. Some of the time, if you go to get any sort of bank accounts in the business name, such as “doing business as”, the bank will require you to obtain the FEIN and if you do it before hand, you have it on you. If you ever get employees, you are required to have a FEIN to file the proper employee related tax returns, i.e. Form 940 and 941.