Most community sports teams will eventually need a tax ID. An informal sports team that simply meets and plays games will not. But a sports team that collects membership dues and fund raises, and hires employees (such as coaches), is going to have to have a tax ID. A tax ID is also known as an employer identification number (EIN) and it’s necessary to: pay taxes, file a tax return, open a business bank account, hire individuals, and pay payroll taxes.
Sports teams can get an EIN when they are officially created, and they should do so immediately. An EIN only takes an hour to get online, and it will make the process of getting bank accounts, permits, and licenses possible. A sports team may start out as casual but is going to need to structure itself and acquire an EIN if it starts bringing in money or paying out money. A community-owned sports team isn’t just good for community and social organization, but it’s also usually a non-profit organization that can gain tax-exempt status.