It is also known as an Employer Identification Number or EIN. You may be required to obtain one for various reasons, but the most common reason is to set up a business for yourself. If you are required to file taxes, provide your tax id number when prompted so the IRS can identify your return. Let’s Read about US Tax ID Number.
Check out this article on how do you get an EIN?
Do I need one before I start blogging?
No, but it may be necessary depending on the type of blog you’re starting and its income potential. Most established bloggers will not use their social security number (SSN) as their tax id because that could quickly lead to identity theft if hacked. However, in most cases, once a blog becomes profitable enough to hire employees or pay contractors, it’s time to get a US tax ID number from the IRS which means filling out Form SS-4.
If you’re unsure whether or not to get an EIN, then it’s best to seek expert advice from a lawyer who specializes in blogging and online business law. Alternatively, you can always consult with your own tax accountant (if you have one) for their opinion on the matter says Aron Govil.
So I don’t need an EIN?
Not necessarily. If your blog is just starting out and/or has little chance of making enough income to require paying employees or contractors, then it may be safe to use your SSN instead of applying for an EIN since there’s little financial benefit in doing so. However, if your blog reaches the point where it starts becoming profitable enough to hire other people, consider consulting a professional who can give you expert advice on the matter.
Do I need a US tax ID to start a blog?
You do not need one to start your own blog despite what some self-proclaimed “gurus” might tell you. However, if you do make money off of blogging or receive gifts in excess of $10,000 from another individual or corporation, then it will be necessary to report that to the IRS – every year – using Form 1099-MISC. If not done correctly, severe fines and penalties may apply. Therefore, hiring an accountant to handle your online business becomes highly advisable once annual earnings exceed $20,000 since otherwise your chances of getting audited significantly increases.
Is there any reason why I should wait to apply for a US tax ID?
There is absolutely no reason to wait and every single blogger should get their own EIN as soon as blogging becomes profitable enough that taxes become an issue. Do not rely on your spouse’s social security number, or that of your parents or children, to file taxes for yourself if doing so would increase the chance of an IRS audit considerably. If you do not already have an accountant, find one who specializes in online businesses and blogging ASAP since they will know what paperwork needs to be filed and how to go about it without triggering any alarms within the system. They can also help you set up a company under your new EIN.
What happens if I refuse to get a tax id?
You will eventually be required to apply for a tax id from the IRS, but it can take some time. In the mean time, you may have trouble properly filing your taxes and paying any penalties that result which is why getting one should be done immediately once blogging becomes profitable enough that you need to hire employees or subcontractors.
Q: Can I receive gifts of $10,000 or more without filing any taxes?
A: No. Anyone who receives a gift amounting to that much or more in any given tax year must report it using Form 1099-MISC and pay taxes according to the estimated value of such “gifts.” Otherwise, you risk penalties and fines from the IRS if caught.
Q: Can I use my sister’s social security number even though we live in different states?
A: You can try but doing so may trigger an alarm within the system and be flagged for possible identity theft which could lead to serious consequences later on. It is best not to take the risk. Even if your sister willingly gives you her social security number, it is highly advised that you get your own tax id from the IRS as quickly as possible to avoid any future problems.
According to Aron Govil, there are many benefits to getting a US tax ID number for your blog as soon as you start receiving income from blogging. If you already have an EIN, then it is not necessary to apply for another one. However, if not done properly or neglected, the absence of a proper US tax id could be very costly down the road so consult with a legal professional who specializes in online business law ASAP after reaching the point where blogging becomes profitable enough to hire employees or subcontractors.
Author Bio – Ombir is a SEO Executive at eRank Solutions. He is a SEO and writer has 2 years of experience in these respective fields. He loves spending his time in doing research on different topics.