When you are ready to begin a business or if you are restructuring your business, a corporation may suit your needs, but there is a particular type of corporation that is different from all of the others. An S-Corporation tax ID is a federal tax identification number generated by the Internal Revenue Service (IRS) so they can know with whom to assign taxes to. The easiest part of setting up your S-Corp tax may actually be filling out the application to get the tax ID number. Everything else may become quite overwhelming.
Understanding The S-Corporation
When your business registers as an S-corporation your business can save on taxes. In other business structures when you get a tax ID number and have employees all of the net income can be taxed, but when you have an S-corp only the shareholder who is employed with the company is subject to the employment tax that must be filed. With an S corp tax ID number the profits and losses garnered through the business can be passed through to the owner’s personal tax return, similar to a limited liability corporation.
If it is beneficial to your company, a LLC can request for S-corp status which will allow your LLC to be taxed like an S corporation. You will need to contact the income tax agency in your state to you can be completely clear about your tax requirement.
Basic Benefits
If you are not going to have shareholders, and you are trying to keep it as simple as possible at the moment, you will still need an S-corporation tax ID number. With this tax ID number you can establish an open line of credit for your business, get business discounts on a company vehicle, office supplies, and other capital, and you could even qualify for a small business loan.
You will need a tax ID number no matter if you are an S-corp, or another type of business structure and IRS-EIN-TAX-ID.com will help you along through the process.