Federal Law require most businesses to have an Employer Identification Number (EIN), also known as Federal Tax Identification Number
Businesses that require EIN include:
- businesses structured as partnership or corporations
- all businesses hiring employees
- businesses that file tax returns on employment, excise or alcohol, tobacco and firearms
- businesses that withhold taxes on income, other than wages, paid to a non-resident alien
businesses that have a Keogh plan
- trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns, Estates, Real estate mortgage investment conduits, Non-profit organizations, Farmers' cooperatives and Plan administrators
The Income Tax of the business depends on the legal structure. In addition to income tax, small businesses have additional federal tax obligations.
Most businesses having employees need to disclose and pay employment taxes such as
- Social security and Medicare taxes
- Federal income tax withholding
- Federal unemployment (FUTA) tax
Proprietors who work by themselves need to pay Self-employment tax (SE tax), which is a social security and medicare tax.
Some businesses may also have to pay excise tax such as
- Environmental taxes
- Communications and air transportation taxes
- Fuel taxes
- Tax on the first retail sale of heavy trucks, trailers, and tractors
- Manufacturers taxes on the sale or use of a variety of different articles
- Tax on certain trucks, truck tractors, and buses that ply on public highways
- tax on wagering
Businesses that sell tangible personal property or provide specific services need to collect and remit sales and local tax in most states, and as such require Sales Tax Permit from the state's revenue agency in addition to the EIN.
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