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Start an Online Business: Do I Need a Tax Id?
By: DEBBIE DRAGON

Deciding to start an online business is both an exciting and overwhelming time. You’ve got quite a bit to consider, from making your website to learning how to drive traffic to it, to deciding what to sell and how to get your supplies. Then of course, there are all the official documentation issues! Don’t let the paperwork intimidate you, it’s a necessary and vital part of starting an online business but it doesn’t need to frighten you from moving forward with your ideas.

As you’ve been researching for your online business, you’ve no doubt come across information about business taxes, id numbers and other equally scary legalities. Someone may have told you that your online business will need a Tax ID.

What is a Tax ID Number

First things first. Exactly what IS a Tax ID number? The easiest way to think of a Tax ID number is to consider it a social security number for a business. It is a nine digit number that is unique to the business it’s assigned to. Another term for a federal Tax ID number is an "Employer Identification Number" (EIN).

When to Get a Tax ID Number

If your plan is to start an online business as a retailer of products, you are going to want to find a http://www.sba.gov/starting_business/taxes/ein.html (form SS-4). Alternatively, you can visit an IRS office for the form. If you don’t plan to hire employees, write across the top of the form "For Identification Purposes Only" to avoid any tax filing confusion!

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