With the help of the e-commerce platform Shopify, you can sell goods online. You might be unsure whether you require an EIN (Employer Identification Number) if you intend to use this platform. The reply is, “It depends on your circumstance.” This article will examine the situations in which an EIN is required and not required.
The IRS issues firms with an EIN, a nine-digit number, for tax purposes. If you hire people, conduct business as a partnership or corporation, or offer certain types of retirement plans, you must obtain an EIN. Your Social Security number can be used in place of an EIN if you are a solo proprietor without any employees.
Let’s move on to the topic of taxation. What amount of sales are exempt from taxes? The answer is that it depends on a number of variables, including the tax regulations of your state and the kind of goods you are selling. In general, you must collect and submit sales tax to your state if you sell products or services that are subject to it. The minimum yearly sales amount required to collect sales tax varies by state but is often close to $100,000.
How much may you sell in a similar manner before paying tax? Again, a number of elements are involved. Your personal tax return must include a statement of your business income if you are a sole proprietor. No matter how much money you make, you must pay taxes on it. However, there are numerous credits and deductions that might lower your tax obligation.
What if my LLC was unsuccessful? You could still need to file a tax return even if your LLC has no revenue. You might also be required to submit a yearly report or pay an annual fee to keep your LLC in good standing depending on the regulations of your state.
Lastly, is creating an LLC via LegalZoom a wise idea? Popular online legal resource LegalZoom assists business owners in opening their doors. LegalZoom can be a quick and inexpensive way to set up an LLC, but it’s vital to remember that they are not attorneys and cannot give you legal advice. It would be preferable to speak with an attorney if you have intricate legal requirements.
In conclusion, your business structure and if you have workers will determine whether you need an EIN for Shopify. There are several things to take into account when it comes to taxes, such as the kind of goods you are selling and the tax rules of your state. It would be prudent to speak with a tax expert or lawyer if you are unsure about any of these matters.