Question

Arvilla wonders if she needs to apply for a tax identification (ID) number as a freelance writing consultant. She took the steps to identify an available business name and then registered it in her state. Arvilla has not yet determined if she will use her own social security number or apply online for a free employer identification number (EIN) or tax ID number. What type of business ownership may NOT be required to obtain a tax ID number? (1 point) Responses Limited liability company Limited liability company Sole proprietorship Sole proprietorship Partnership Partnership Corporation Corporation

Answer 1

A sole proprietorship may NOT be required to obtain a tax identification (ID) number, as the owner can use their own Social Security number for tax purposes. However, if the sole proprietorship hires employees or meets certain other criteria, obtaining an Employer Identification Number (EIN) may be necessary.

In contrast, other business structures like limited liability companies (LLCs), partnerships, and corporations generally require an EIN, regardless of the number of employees.