It is not completely necessary as you can have a business as a "sole
proprietor" and pay taxes under your personal tax return. Your sole
proprietor business can also get a business name called "doing business as"
or dba.

However, it is a very good idea to create a separate business entity and get
a separate tax id. That way you segregate your personal assets from your
business assets. It comes down to protecting your personal stuff from a
business failure. Even if you do not have any stuff now, you could in the
future.