In what ways can i use my Fed tax ID- EIN number?
by Kimberly Svatos
(Norfolk Ne, USA)
In what ways can i use my Fed tax ID- EIN number? Answer
Hi Kimberly and thank you for your question.
An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a nine-digit number that the IRS assigns to business entities. The IRS uses this number to identify taxpayers that are required to file various business tax returns. How can you obtain a federal tax ID for your home child care business??? Follow this link: Register for EIN
to apply for one. But why would you ever want to do this? Here are a few reasons:
*If you are worried about having to give your social security number
to your daycare parents at the end of the year for taxes or for their child care reimbursement you can use this number instead.
* I also use mine for filling out all tax forms
required by the childcare food program, my registration or licensing, our 1040 tax return at the end of the year-rather, and pretty much any business form so I do not have to use my social. I feel safer using this number because of all of the identity theft that is out there!
* As a child care provider with your own small business
you will need to pay business taxes.
*If you choose to have one or more employees
you will need a tax id.
* If you want to open a bank account
for your home daycare business.
* If you decide that you may want to start a line of business credit.
* If you choose to form an LLC, Corporation, or Partnership.
My home child care business is LLC (limited liability company).
I hope that this will answer your question Kim. As you can see it is an important part of being a professional business owner! Thank you!