TAX-ID? EIN? Social security number? what to use for small business?

Question

Purchasing a tiny neighborhood market that sells beer & lottery as well. It'll be a sole proprietorship under my name. Me and my wife will be the only ones working(no employees). I don't know which one to use.

I am in Los angeles if that matters.

Answer 1

Yo! Are you in the Hood?

First of all, the IRS will help!!! Yes. That is your tax dollar goes. You better use Uncle Sam to help you. And they want you to do the accounting correctly. So they can collect taxes from you.

http://www.irs.gov/businesses/small/arti...

Your question!!!

***Do You Need an EIN?****
THAT WILL BE A YES.

Do you have employees?

Do you operate your business as a corporation or a partnership?

Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?

Do you withhold taxes on income, other than wages, paid to a non-resident alien?

If you say yes to any of the question above, you will need to get an EIN. I am sure you sell the REAL BEER. NOT THE FAKE OR THE WEAK ONES!!!

See IRS link below!!!

http://www.irs.gov/businesses/small/article/0,,id=97872,00.html


How to Apply for an EIN?
http://www.irs.gov/businesses/small/article/0,,id=97860,00.html

A. Are you keeping the record the way that the IRS want?

Starting a Business and Keeping Records
http://www.irs.gov/pub/irs-pdf/p583.pdf

What record do I keep?
http://www.irs.gov/businesses/small/article/0,,id=98575,00.html

Bookkeeping (book-keeping or book keeping) is the recording of all financial transactions undertaken by an individual or organization. The organization may be a business, a charitable organization or even a local sports club. Bookkeeping is "keeping records of what is bought, sold, owed, and owned; what money comes in, what goes out, and what is left." A financial transaction is any event that involves money.

http://en.wikipedia.org/wiki/bookkeeping...

You need to have a professional bookkeeper. If you want to do it on your own, here are the two biggest ones:

http://quickbooks.intuit.com/
http://www.peachtree.com/

B. Who is doing the payroll (form 940)? Are you running the payroll taxes yourself as well? Are you using EFTPS? Who is doing payroll for your state taxes?

https://www.eftps.com/eftps/

Peachtree and Quickbooks can manage these issues.
C. Are you thinking about the Caterial Plan (All-You-Can-Eat for your PRE-TAX money: Medical/Dental Insurance, 401(k), Term Life, Childcare, etc.)? Do you need a financial advisor or an insurance agent for that?

D. Did you start your company as a sole proprietor (schedule C), a partnership (form 1065), a S-Corp (1120S), C-corporation(1120), or LLC? Do you know the differences between them?

Here is a good SBA web site for the differences between them:

http://www.sba.gov/smallbusinessplanner/

I always recommand at least have a tax professional to do your tax return the first time. Here are the two softwares that you may consider if you are doing the taxes on your own:

Taxcut Home & Business
http://store.taxcut.com/dr/v2/ec_Main.Entry17c?SID=1478&SP=10023&CID=0&PID=924559&PN=1&V1=924559&CUR=840&DSP=&PGRP=0&ABCODE=&CACHE_ID=0
Turbotax Home & Business
https://turbotaxweb.turbotaxonline.intuit.com/open/registration/Start.htm?productid=32&customerSource=3468337910

Answer 2

2

Answer 3

It is best that you acquire a federal id # by filling out form
SS-4. You can get that form from irs.gov and search for it under forms and publications. Its a one page form--no fee involved. In the area of purchasing wholesale, the vendor may request your id #. You certainly don't want to have your SS # floating around. Also, you may end up having an employee or two and you'll have the employer id # as that federal id# is the same thing. Good luck on your new venture.