Updated: Jan 16, 2019
Many, but not all, business are required to obtain an Federal Tax ID Number also known as an EIN (Employer Identification Number) to file returns and make federal tax payments.
What is a DBA? DBA stands for "Doing Business As". Example: You're a sole proprietor named Susan Wright and you sell embroidered bed sheets online as "Suzzy's Style". Or maybe your business is incorporated as "SW Styles Inc." and you operate under two DBAs: "Suzzy's Scarves" and "Sewing with Style".
So do you need an EIN? If so, do you need one for your DBA's or your for your official business name, or both?
a trade name is similar to a DBA, although you're not legally required to register your DBA in Arizona, it's a good practice to do so and allows you to register your business name for public record. It does not give you exclusive rights to a business name nor does this legally register your business as a corporation or LLC, you'll need to do that separately.
Having an EIN would also follow along the same kind of guidelines. You would apply for, and receive an EIN for your legal business name. In the example of a sole proprietorship, that would be the full legal name of the owner. In the 2nd example of a limited partnership, corporation or limited liability company, it’s the name listed on the formation documents you filed with the state—in our example, it’s “SW Styles Inc.” That’s because an EIN is used for tax purposes, and your business is the entity that pays taxes. Your DBAs are just your business nicknames, and therefore, you won’t have a separate EIN for a DBA.
You may not need an EIN
Depending on how your business is organized & what kind of taxes you'll be paying will determine whether or not you'll need an EIN.
These choices can be confusing when new business owners are starting off. For piece of mind, be sure to call or contact us for a free consultation! We're here to make it easier to start a business in Arizona. (480) 420-9740 or firstname.lastname@example.org