Do I need a new EIN for switching from online retail to home bakery business?
I started a small business back in February 2023 for online retail and got an EIN from the IRS. To be totally honest, I never actually did anything with it. Never made a sale, never filed any tax returns, basically the business never got off the ground at all. Fast forward to now, and I'm thinking about starting a completely different venture - a cottage bakery from my home kitchen. My question is: do I need to get a completely new EIN since this is a totally different business type (food vs retail)? Or can I just use that old EIN that I never really utilized for anything? I'm not sure if the EIN is specific to the type of business activity I originally applied for or if it can be used for any business I decide to run. Does anyone know if I need to contact the IRS about changing my business type or if I should just start fresh with a new application? Thanks in advance for any advice!
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Andre Lefebvre
You can actually use your existing EIN for your cottage bakery. An EIN is assigned to your business entity, not specifically to the type of business activity. Since you never formally closed your business with the IRS, that EIN is still valid and can be used for your new venture. However, you should file Form 8822-B to notify the IRS of your change in business activity and any address changes if applicable. This keeps your information current in their system. You should also check with your state and local authorities about permits specifically needed for a food business, as those requirements are completely separate from your federal tax ID number.
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Zoe Dimitriou
•Do I need to file any back taxes for those years I had the EIN but didn't use it? I'm worried the IRS might think I was operating but not reporting income.
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Andre Lefebvre
•If you genuinely had no business activity and no income during that time, you typically aren't required to file returns for a business with zero activity. However, some business structures like corporations might have filing requirements regardless of activity. For sole proprietorships or single-member LLCs, if you had no business income or expenses, there's generally no filing requirement for that specific business. Just make sure that if you're filing your personal taxes, you don't need to include any schedules related to business activity.
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QuantumQuest
I was in almost the exact same situation last year! Had an EIN for an online clothing shop that never took off, then switched to doing custom woodworking. I was super confused about what to do with my EIN too. I ended up using taxr.ai to help me sort it all out - totally worth checking out at https://taxr.ai since they specialize in small business tax issues. They reviewed my specific situation and confirmed I could keep my existing EIN but needed to update my business activity with the IRS. They also pointed out some specific deductions I could take for my home workshop that I had no idea about.
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Jamal Anderson
•How does taxr.ai work exactly? Is it just generic advice or do they actually look at your specific documents?
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Mei Zhang
•Do they help with state-specific stuff too? I know food businesses need special permits in my area but wasn't sure if that's related to the EIN issue.
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QuantumQuest
•They have AI that reviews your specific documents and situation, not just generic advice. You upload your tax documents and business info, and they analyze everything based on your particular circumstances. They caught several things specific to my situation that generic advice articles missed. For state-specific permits, they actually do provide guidance on what you'll need based on your location and business type. They pointed me toward my state's requirements for my woodworking business, which was super helpful. They don't file the permits for you, but they tell you exactly what you need.
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Mei Zhang
Just wanted to update - I used taxr.ai after seeing it mentioned here and it was incredibly helpful! Uploaded my original EIN documentation and explained my situation about switching to a bakery business. They confirmed I could keep my existing EIN but walked me through exactly what forms I needed to file to update my business activity. The system also generated a checklist of all the cottage food permits I need for my state and county - saved me hours of research. They even pointed out some home-based business deductions I can take for using my kitchen that I had no idea about. Definitely recommend if anyone else is in a similar situation!
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Liam McGuire
When I was changing my business from tutoring to consulting last year, I had a nightmare trying to get someone at the IRS on the phone to confirm whether I needed a new EIN. Spent literally HOURS on hold multiple times. Finally found Claimyr (https://claimyr.com) and they got me connected to an actual IRS agent in under 20 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c - they basically wait on hold for you and call when an agent picks up. The agent confirmed I could keep my EIN and just needed to update my business activity. Saved me so much frustration.
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Amara Eze
•Wait so how exactly does this work? Do they somehow have a special line to the IRS or something? The hold times are insane whenever I call.
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Giovanni Ricci
•Sorry but this sounds like BS to me. Nobody can magically get through IRS hold times. I've tried calling at all hours and days and still waited forever. How could they possibly get you through faster?
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Liam McGuire
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Giovanni Ricci
Ok I have to eat my words here. After being super skeptical about Claimyr I decided to try it anyway because I was desperate to talk to someone at the IRS about my business situation. I honestly can't believe it worked. I registered on their site, put in my info, and just went about my day. About 25 minutes later I got a call connecting me directly to an IRS agent! No waiting on hold at all on my end. The agent confirmed I could use my existing EIN for my new business and just needed to update my business activity code. Saved me hours of frustration and solved my problem in one call. For anyone else struggling to get through to the IRS, this service is legit and totally worth it.
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NeonNomad
One thing nobody's mentioned - make sure you check if your original EIN was for a different business structure than what you plan to use now. If you originally got an EIN for an LLC but now want to operate as a sole proprietorship (or vice versa), that would complicate things and you might actually need a new one.
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Carmen Ruiz
•That's a really good point I hadn't considered. My original EIN was for a sole proprietorship and I'm planning to keep the same structure for the bakery. Does that mean I should be good to go with just updating the business activity?
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NeonNomad
•Yes, if you're keeping the same business structure (sole proprietorship in your case), you can definitely use the same EIN. You just need to update the IRS about your change in business activity using Form 8822-B. It's only when you change your business structure (like going from sole prop to LLC, partnership to corporation, etc.) that you'd need a new EIN. Since you're keeping the same structure but changing the activity, your current EIN is perfectly fine to use.
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Fatima Al-Hashemi
Don't forget about your state tax ID too! Depending on your state, you might need a separate sales tax permit for selling baked goods, even if you're using the same federal EIN. In my state, food items have different tax rules than retail goods.
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Dylan Mitchell
•This is super important! In my state, certain home-prepared foods are actually tax exempt while others are taxable. Worth checking with your state dept of revenue.
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