If you’re starting a new or purchasing an existing business; congratulations! Do you have your EIN yet?
Whether your business is a sole proprietorship, partnership, limited liability corporation (LLC), corporation, or S-Corp, having an Employer Identification Number or EIN is a good idea. An EIN identifies tax returns filed with the IRS. An EIN also gives business owners the ability to keep their business’ tax records and liabilities separate from their personal taxes and obligations.
As the owner of a business, an EIN may be required. An EIN is a nine-digit number that is only used for a business and its activities and should never be used in place of a Social Security number or SSN.
Getting a Tax ID Number
A federal Taxpayer Identification Number (TIN) can be issued by the Social Security Administration or the IRS for taxation. TIN’s include:
- Social Security Numbers (SSN)
- Employer Identification Numbers (EIN)
- Individual Taxpayer Identification Number (ITIN)
A TIN is required on any tax-related statements, returns, exemptions.
You can use your TIN as a way to open a bank account, filing taxes, applying for credit for your business, or when conducting business with other firms and organizations such as suppliers or professional associations.
About Employer Identification Number (EIN)
When a business pays wages to employees, offers stock and other benefits, has a self-employment retirement plan, or changes hands, having a new EIN may be required for tax purposes. If you file tax returns that include employment, excise fiduciary, or alcohol tobacco and firearms, you will need to have an EIN. Sole proprietors who do not fall under these requirements will still want to have an EIN if they wish to open a bank account for their business.
If the principal ownership or structure changes, obtaining a new TIN or EIN is beneficial to separate the obligations of the old business from that of the new business. This is especially important when an existing business is inherited or changes hands.
How to Get a Tax ID Number or EIN
Getting an EIN is a simple process. Before you start, you will need the following:
- The business name
- The address for the business. If you have a home based business, you may use your home address.
An EIN application or Form SS-4 may also be printed from the IRS website, or your local public library may also have forms you can copy.
Complete the form by including the name of your business, your business address and other information on the form. You may then submit the form by fax or sending it by mail.
An additional method is to call the IRS’ Business and Specialty and Tax Line at (800) 829-4933 Monday through Friday, from 7 am to 10 pm. You will need to provide your business name and address and other necessary information. You should receive your EIN by mail in approximately four weeks.
The fastest and most preferred way to get an EIN is by filling out an EIN application form online. An EIN will be given while the applicant is online within the same session if approved. Once approved, the EIN may be used immediately.
It is important to note that the entire application for an EIN when submitted online, it must be completed in the same session. Information for the online EIN application cannot be saved.
Once your online application is completed and your EIN is issued, be sure to save and print a copy of the confirmation for your records.