should i get an employee identification number when starting a home business?
September 18, 2009 by workathomebizreviews
Filed under Home Business FAQ
amy g asked:
I am starting a home business and would like to know if I should get an EIN for my business? I don’t have very good credit, and thought that by getting this, I would be able to obtain credit for my business. Any suggestions about reasons why or why not would be appreciated.
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I am starting a home business and would like to know if I should get an EIN for my business? I don’t have very good credit, and thought that by getting this, I would be able to obtain credit for my business. Any suggestions about reasons why or why not would be appreciated.
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First, the EIN is Employer Identification Number, not Employee.
It should not help your credit rating.
If you are setting up to operate your business with the expenses and taxes going on your Schedule C then there is little no point to getting the number and your personal credit is what is involved.
If you have bad credit, you had better have enough cash to carry you through the startup.
Only if you have employees or you structure as one of the various protective devices (like Incorporation) are you required to have an EIN.
You clearly need to explore more about setting up a small business.
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Mike above is correct TO A POINT….. you will have sales taxes if you are selling something, business taxes if you are running a business, and a DBA Certificate —-ALL of which require you to have an Employer ID Number in order to file these taxes and acquire your DBA (doing business as)…. If you are selling a product or service, sales taxes will have to be collected and you will have to file sales tax returns with your state…. as far as your credit is concerned, Mike is 100% correct—-you will have EXTREME difficulty getting any kind of loan (business or otherwise) with bad credit and NO number will help that….make sure too that you set up separate banking accounts for your “business income” so that when tax time rolls around, you will not have to try to separate personal finances from your business finances…that will already be done for you when you conduct ONLY BUSINESS transactions with your business account…Go to Yahoo search and type in HOW TO START A HOME BUSINESS…. scroll down and click on the link exactly as I have written it here—then look under LEGAL REQUIREMENTS…. for some reason, when I type a link into here or try to copy and paste it, it gets cut off…..