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Questions about taxes and IRS issues

What is a Federal Employer Identification Number? Do I need a tax ID number? Does incorporating in Delaware or Nevada allow me to avoid taxes in my home State? Do I need permission to conduct business in another state than the state in which I'm incorporated? Does the IRS tell me how much I will have to pay for Taxes ?

What is a Federal Employer Identification Number?

A Federal Tax Identification Number (also known as a "95 Number" or "EIN Number" or just "Tax Id") is a number assigned to a corporation or L.L.C. by the Federal Government for purposes of taxation. The Federal Tax ID Number is to a corporation or L.L.C. as a Social Security Number is to an individual.

Most banks require that a corporation or L.L.C. obtain a Federal Tax Identification Number as a prerequisite to opening a bank account regardless of whether the company will have employees. ActiveFilings.com can prepare your Federal Tax Identification Number Application (IRS Form SS4) at your request.

Once you receive the prepared application from our office, you may contact the I.R.S. with the completed form and obtain the actual "95 Number" over the telephone in just minutes!

Do I need a tax ID number?

Yes, all corporations must have a federal tax ID number to do business. This number will be required to fill out payroll reports, pay taxes, open a business checking account, etc. The Federal form is called a SS-4.

Does incorporating in Delaware or Nevada allow me to avoid taxes in my home State?

No. Corporations are created by each state under its own rules and laws. If a foreign corporation wants to do business in another state, it must first qualify in that other state. At the moment the foreign corporation qualifies, it becomes subject to all the laws and taxes of that state. No state will permit a foreign corporation to evade its tax law.

Do I need permission to conduct business in another state than the state in which I'm incorporated?

Yes. A foreign corporation wishing to do business in another state must qualify to transact business in that other state. The penalty for failure to qualify to transact business in another state includes the ability to be sued, but not to sue, in the particular state. While ActiveFilings.com can provide this service, it's generally a easy process to contact that State's Department of Commerce with the request. And, if you are going to conduct ongoing within another state, it's good common sense to understand a little more of the requirements of that state yourself!

Does the IRS tell me how much I will have to pay for Taxes?

Neither the state or the IRS notifies of any estimated income taxes that must be paid. They will send you the returns that are required to be filed for the quarterly payroll taxes that may be due for any employees that you may have.

 

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