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Fed. Tax ID

September 3 2003 at 11:36 PM
 


Response to Starting a business...??

 
Your federal Tax ID is a requirement for employers. The fact that you are set up as a sole proprietor isn't the deciding factor.

The big question is whether or not you have employees.

Once you hire an employee, you have to start withholding the necessary FICA taxes, contribute your matching share as their employer, and make monthly or quarterly deposits. Then there is also the unemployment/payroll tax(es) that you have to file with your state tax office. In addition to monthly payments, you may also have quarterly reports on the unemployment taxes.

Without employees, you should be paying the SE or self-employment tax on your full income. It is still the same 15.3% total as you would submit for your employees with your matching dollars. As a sole proprietor, you may not need to worry about

It gets more complicated as they now split the Social Security tax (which is capped) from the Medicare tax which isn't.

Your local Social Security office should be able to provide you with the necessary forms, or you can get them from your bookkeeper or CPA. If you don't have one, you might want to investigate the need for a professional tax service to handle both employee payroll taxes and sales taxes.

If you are in a state that has sales taxes, you need to get with your county tax office to get separate tax ID numbers for state, county, and municipal sales taxes. Con't have a bookkeeper or CPA, re-consider the need for one.

I'm a business owner/salesperson. I hire a CPA to take care of my payroll taxes and tax filings. And, I'm the only person on the payroll of my Sub-Chapter S corp.

If you have to handle sales taxes and payroll taxes, along with your business and personal income taxes at the end of the year, and think you don't need professional help, you may want to get professional business counselling.

Improper handling/filing of sales and payroll taxes has gotten many businesses in trouble, and possibly put them out of gusiness.

As for marketing/advertising, that is more my primary field. But, I can't tell you where to begin without knowing two important factors. Who is your target market, and what type of products or services are you selling. To give advice without knowing those would be like performing surgery on a patient, without knowing what needs to be repaired or removed.

If you still don't have professional help on your business/payroll/sales taxes, you might want to set aside time to call a few professionals for their advice.


 
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