How to Get a Washington Tax ID for Your Business
Receiving a tax identification number is an important step for any business owner, but can be seemingly overwhelming to do. While the large amount of government paperwork can be deterring, the process can be simply broken down simple steps. In this article you will learn how to mitigate the tax ID process within Washington state so you can legally operate and scale your business further. This articles is merely a help obtaining a washington tax id – not a strict guideline.
What is the First Step?
The first step in getting a tax ID is filling out the correct documentation for an Employer Identification Number, otherwise known as an EIN. This is a unique set of nine digits attached to your business which are required to open a bank account, file taxes, and hire employees. It serves as a “social security number” to your business. You acquire this by registering your business, which results in it becoming a distinct legal entity with an inherent set of rights and responsibilities. Before initiating this process, it is important to consider the structure of your business and what title it will claim, the individual who will serve as the responsible party, and the physical address that the business will be attached to on record. An easy way to know if your business needs to be registered is if your enterprises’ gross annual income exceeds $12,000 per year.
Washington State and Federal Tax ID
As the name implies, these tax ID’s correspond to the rate at which your enterprise will pay state and federal taxes. These forms are used by the IRS to place your enterprise in the correct tax bracket. The process of obtaining a federal tax ID is identical to applying for a state one, and you can apply directly online through the IRS’s interactive portal. There are many services online that can funnel you through the application process quickly and seamlessly.
Why do I need an EIN?
Even if you are not looking to get a tax ID, an EIN is crucial in protecting your business and your personal assets from legal disputes. If you are generating a revenue and do not pay taxes this can put you at risk for incrimination. You can read more on the process of registering your business as a corporation in Washington state via the Washington Secretary of State website and the State of Washington Business Licensing Service here. Once you have acquired all the necessary documentation you can mail, scan, or fax in your submissions. Keep in mind there is a $19 non-returnable fee for processing your application.
Washington state has a highly competitive economy and has an active start-up environment. This makes it a very exciting place to start or continue a business. It is home to some of the largest companies in the country such as Amazon and Microsoft. But before you can tap into the market, you must verify your taxable entity (corporation, non-profit, etc.) with the state. By following the steps in this article you will be able to navigate the process of registering and will be setting up shop in no time!