If you are going to start a small business in the United States, you will have to obtain an Employer Identification Number (EIN) or the Tax ID number. It is a nine-digit number assigned by the Internal Revenue Service (IRS) to businesses for the purposes of identification.
Employer Identification Numbers (EINs) are used by employers, sole proprietors, corporations, partnerships, non-profit organizations, trusts and estates, government agencies, certain individuals and other business entities. These numbers are used to identify taxpayers that are required to file various business tax returns.
An employer needs an EIN to pay employees and for filing for a business tax returns. Once an EIN has been issued to an employer, it will not be reissued. EINs do not expire. All businesses must file an annual income tax return. There are 5 types of business taxes.
1) Income Tax – a tax imposed on individuals or entities. Taxable income of taxpayers is generally total income less income producing expenses and other deductions. Self-assessment of tax is required of the tax payers and advance payments of tax by tax payers may be required. Those who do not pay their tax on time are generally subject to a certain amount of penalty.
2) Estimated Taxes – a tax on income that comes from self-employment, business earnings, interest, rent, dividends and other sources. This tax is usually paid quarterly.
3) Self-Employment Tax – is the Social Security and Medicare tax paid by self-employed individuals. It is withheld from an employee’s pay check.
4) Employment Taxes – as an employer, you must withhold certain taxes from your employees pay checks. Employment taxes include a) Federal income tax withholding, Social Security & Medicare taxes, and Federal unemployment tax act (FUTA).
5) Excise Tax – are taxes paid when purchases are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product. There are also excise taxes on activities, such as on wagering or on highway usage by trucks.
If an employer has employees working under him, he has to pay certain taxes and certain forms to file. If you are a first type employer and is new with the process of tax id filing, I would suggest that you get help from the experts. Gov Doc Filing has an extensive network of tax professionals that can help the employer obtain his or her EIN in a short time. These experts are effective and efficient in getting the formation of your Limited Liability Company formed.