Gotta love it when a blog post title is more acronym-based than words, right? Some readers might recognize all of these terms while others will pick out only a couple of familiar ones. Still, others might not have a clue what any of these mean, and that’s where we come in to help out.
Here’s what work-from-home entrepreneurs need to know about these terms and the effects they can have on your business throughout the year.
Doing Business As name (DBA)
What does that mean? DBA stands for “Doing Business As” name. If your business conducts any business under a name that isn’t your own — including marketing, advertising, or transactions like collecting checks and payments — then you’ll need to register for a DBA in the state or county in which you do business. One other common misconception? A DBA is not the same thing as a trademark. Trademarks grant the owner exclusive rights to the name whereas a DBA is simply a name that identifies the business.
What can filing for a DBA do for your business?
By filing for a DBA, your business gets a business identity that presents it in a professional light to customers and vendors. Once you have registered for one, you’re allowed to conduct business and receive payments under a name that is different than that of your legal business name. You can also use a DBA to open up a bank account for the business — and most banks will require a certified copy of your DBA when creating a business bank account.
Employer Identification Number (EIN)
What does that mean? An EIN is your Employer Identification Number issued by the IRS to uniquely identify employer tax accounts. These are also referred to as Federal Tax ID numbers and never expire or need to be reissued. EINs are also legal requirements for entrepreneurs who must identify their business using either their social security number or an EIN.
What can filing for an EIN do for your business?
Many businesses may believe that EINs are only necessary when one plans to hire employees. This is partially true since you will need to file for an EIN if you’re hiring, but EINs matter whenever your business decides to open a bank account, establish a credit profile, or change its organization type. Some entrepreneurs also choose to use an EIN instead of their SSN to safeguard against identity theft since EINs are much less sensitive to use than your SSN.
State Unemployment Insurance (SUI)
What does that mean? SUI stands for state unemployment insurance, an employer-funded tax program that provides short-term benefits to workers who suddenly become involuntarily unemployed.
What can SUI withholding do for your business?
Planning to hire or already have employees? You’re required to pay unemployment taxes on their wages in the state. The general rule is that once more than $300 in wages is paid to an employee, the employer is responsible for paying for their state’s unemployment insurance. Maintaining unemployment is time-consuming and expensive, so entrepreneurs often turn to professionals for help in staying compliant with SUI requirements. For self-employed workers not planning to hire, they may purchase unemployment insurance and pay themselves as an employee of the business if they have a company incorporated as an LLC or corporation. However, it’s still a good idea to check in with the state your business is in and determine what their laws are like concerning this program first!