• PPP The Second Time Around
    The Emergency Coronavirus Relief Act of 2020 passed in December contained $284 billion for the renewed Paycheck Protection Program (PPP). Click here to read the article.

tax ID

chalue

LawnSite Member
Location
Massachusetts
Hello all. long time member first time owner/operator.I would like to start out in the spring or the latest in the fall but I was wondering if it is a good idea to have a Tax ID?and if so what are the benefits from it if any
thanks again
payup
 

LB1234

LawnSite Gold Member
Location
Central Jersey
Depends...do/can you use your ss# for your tax ID...sole proprietors can do this. I don't know of any others.

As far as what it does for you...in a nutshell it makes you a legit company. this is the number you would use for filing taxes under your company name. Unless you don't plan on filing taxes, you need it.
 

HOOLIE

LawnSite Gold Member
If you're a sole proprietor with no employees, you can usually just use your SS# for tax purposes. You can log on the IRS website, it tells you whether or not you'll need a separate tax #. Once you have employees on payroll you'll have to get one. It's easy to obtain one, you can do so on the IRS site if you need one.
 

Az Gardener

LawnSite Gold Member
Location
Phoenix, Az
It depends what you mean by tax ID # What I call my tax ID # is a # assigned to me by the state so when I purchase materials to be resold I give this # to the merchant and do not pay sales tax to them but to the state later after I have resold the item and taxed my customer (at a higher rate of course) I send the $$$ to the state. The other # I have is an EIN # even though I am a sole prop I have employees therefore I need an EIN #it is my ss without the dashes. I am not a tax guy and that is who you should be asking. I was very lucky that I got a very good tax guy /CPA in the beginning he has made/saved me as much as any employee. I don't make a move without consulting him first.
 

qps

LawnSite Bronze Member
Location
Indy
Az Gardener said:
It depends what you mean by tax ID # What I call my tax ID # is a # assigned to me by the state so when I purchase materials to be resold I give this # to the merchant and do not pay sales tax to them but to the state later after I have resold the item and taxed my customer (at a higher rate of course) I send the $$$ to the state. The other # I have is an EIN # even though I am a sole prop I have employees therefore I need an EIN #it is my ss without the dashes. I am not a tax guy and that is who you should be asking. I was very lucky that I got a very good tax guy /CPA in the beginning he has made/saved me as much as any employee. I don't make a move without consulting him first.

Your referring to a state sales tax ID #. If you have employess there is no way I would still be a sole prop. An S corp separates your personal assets from business assets...so if you were sued, someone couldn't't take your home or personal assets....solo operator can get away with it for while but I wouldn't't recommend it for very long.
 

Az Gardener

LawnSite Gold Member
Location
Phoenix, Az
Thats where a good tax guy comes in, I have many more tax benefits and flexibility by being a sole prop. The extra Insurance to cover catastrophic events is significantly less $$ than the $$ I would loose by being a S-corp. My attorney wanted me to incorporate but when pressed he had to admit given the work I do the extra insurance coverage I have is enough to cover 99.9% of anything that could happen. With all that said 06 is going to be a year of change and I probably will be going LLC on the advise of my tax guy and attorney.
 
Top