Essential Identification Numbers: Accounting for Small Business
Michael Broida, CPA of Heller, Broida & Eisenberg Accountancy Corp. (www.HBEAC.com), discusses identification numbers essential to your business and it's banking procedures.
- A federal tax ID number (FIN)- needed for a business bank account
- Certain state identification numbers may be needed
- A resale number is needed for wholesale & retail businesses
What you need when you start a business are various identification numbers.
You may need a federal ID number. This will allow you to open up a bank account because the bank is looking for that number. Also, for employment taxes, you’re going to need that number. You may need -- because you’re paying wages – you’re going to need a state employment number. This can be obtained from the state in which you’re operating. Most of these can be done online and don’t require you to show up any place.
You may need a resale number if you’re selling product, either wholesale or retail, when in some instances, manufacturing. This allows you to buy product if you’re reselling without paying sales tax. If you are paying sales tax, then, you need this number to report your taxable sales to your state. Not all states have sales tax, but most do. And it’s an important source of revenue for many states. These are again easy to obtain and are a must for most businesses.