Do you need a tax ID number for your eBay business?

Sole proprietors are not necessarily required to get a tax identification number, but it may be a good idea to have one. 

A tax identification number or an EIN (employer identification number) is a nine-digit number that is assigned by the IRS to businesses to be used when filing tax returns, hiring employees, and for setting up qualified retirement plans.  Many banks require an EIN to apply for a loan or to setup a business bank account as well.

You can get your EIN by completing IRS Form SS-4, Application for Employer Identification Number, which is available at the IRS website (www.irs.gov).  Click on Businesses, Employer ID Numbers for information and instructions on how to obtain your EIN.  You should also check with your state to see if you are required to get a state ID number.

For more great eBay tax tips, please read our free special report, Tax Tips for eBay Sellers.

Tags: ebay tax, tax id number

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