Friday, February 10, 2012

Doctor's Tax ID

A doctor’s office is a business and every business in the United States is required to file taxes. Citizens pay private taxes using our social security number as an identifier and many businesses are assigned something called a tax identification number as their identifier. The tax ID number is assigned by the Internal Revenue Service (IRS).

When medical bills are processed and paid by the insurance company, the revenue is reported to the IRS using the tax id number. At the end of every year, insurances send a report of revenue to the doctor and the IRS. This report is called a 1099.

Although a tax id is very common, it is not mandatory; a physician can opt to use his/her social security number instead. Most accountants will advise against the use of the social security number as it can result in complications at tax time arising from the mixed business/personal finances. One way or the other, it is imperative that the business manger and billing staff know the number.


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