Should You Get a Business Tax Identification Number? Reading Answers

Aug 16, 2024

Should You Get a Business Tax Identification Number? Reading Answers is an academic reading answers topic. Should You Get a Business Tax Identification Number? Reading Answers have a total of 6 IELTS questions in total. In the questions, you have to answer the questions with one or two words.

Candidates should read the IELTS Reading passage thoroughly to recognise synonyms, identify keywords, and answer the questions below. IELTS Reading practice papers, which feature topics such as Should You Get a Business Tax Identification Number? Reading Answers. Candidates can use IELTS reading practice questions and answers to enhance their performance in the reading section.

Section 1

Should You Get a Business Tax Identification Number?

In the United States, people who operate their businesses may apply for a tax Identification number for their business. A business-based tax identification number is very similar to the personal Social Security Number (SSN that Americans use to pay their personal taxes. However, unlike the SSN, the business tax ID is created specifically for paying taxes on business profits. As a result, having such an ID can make it easier for business owners to deal with tax agencies. With a business tax ID, you can...

• Open a business bank account. Business bank accounts tend to come with special perks and support from private banks. Such accounts also help you keep your business finances distinctly separate from your ones which can help to avoid confusion or mistakes in your budgets.

• Be eligible for a reseller's license. These licenses, issued by individual states, allow you to purchase wholesale goods at lower prices and resell them to the general public. Wholesalers will request a copy of your reseller's license before they will sell to you.

• Issue paychecks to employees. If you do not have a business tax ID and want to hire regular workers to help you run your business, you need to get one. Otherwise, you can only pay people for business help temporarily There are no distinct disadvantages to getting a business tax ID. However, the process can be time-consuming and does involve some fees. Moreover, as long as you are using your business tax ID, it will be necessary to fill out additional tax forms when filing and paying taxes. So if your business is a small, part-time side-venture, getting a business tax ID may not be worth your while. However, if a significant amount of your income comes from your business, a business tax ID may make it easier to organize your finances, receive payments from customers, and expand your operations. Additionally, if you have reached the point where you have or need- a staff of regular employees at your business, a business tax ID is a legal necessity. If it seems like the right time to get a separate tax ID for your company, tax ID requirements are publicly posted on the Internal Revenue Service website. You may also want to consult with an accountant as you consider getting this type of ID.

Questions 21-26

Use NO MORE THAN TWO WORDS from the text for each answer

21. Which government ID is NOT designed to deal with business earnings?

Answer: SSN

Supporting statement: “........A business-based tax identification number is very similar to the personal Social Security Number (SSN that Americans use to pay their taxes.........”

Keywords: personal, Number

Keyword Location: para 1, lines 2-4

Explanation: The passage explains that a Social Security Number (SSN) is used for paying personal taxes and is different from a business tax ID, which is specifically for business profits.

22. What organizations give preferential treatment to some business owners?

Answer: BANKS

Supporting statement: “........Business bank accounts tend to come with special perks and support from private banks.........”

Keywords: bank, private

Keyword Location: para 2, lines 2-3.

Explanation: The text mentions that business bank accounts, which come with special perks and support, are one of the advantages of having a business tax ID.

23. What authorization can you get from individual states?

Answer: RESELLER’S LICENSE

Supporting statement: “.......These licenses, issued by individual states, allow you to purchase wholesale goods at lower prices and resell them to the general public.........”

Keywords: goods, prices

Keyword Location: para 2, lines 6-7.

Explanation: The passage states that a reseller's license, which allows the purchase of wholesale goods at lower resale prices, is issued by individual states.

24. What kinds of workers should you hire if you do not have a business

tax ID?

Answer: TEMPORARY

Supporting statement: “.......Otherwise, you can only pay people for business help temporarily..........”

Keywords: only, basis

Keyword Location: para 3, line 4.

Explanation: It is indicated that without a business tax ID, you can only pay people for business help temporarily. Hence temporary is the correct answer.

25. What do you need to pay to receive a business tax ID?

Answer: FEES

Supporting statement: “........However, the process can be time-consuming and does involve some fees........”

Keywords: process, fees

Keyword Location: para 4, line 2

Explanation: It is mentioned that obtaining a business tax ID can be time-consuming and involves some fees. This indicates that there is a monetary cost associated with getting a business tax ID.

26. Who can advise you about getting a business tax ID?

Answer: ACCOUNTANT

Supporting statement: “.......You may also want to consult with an accountant as you consider getting this type of ID.........”

Keywords: getting, type

Keyword Location: para 5, line 4

Explanation: The passage suggests consulting with an accountant when considering getting a business tax ID. This advice points to an accountant as a knowledgeable source for guidance on this matter.

Read More IELTS Reading Related Samples