How To Get a Business Tax Id Using These Tips and Resources

Tips and Insights For Getting A Tax ID

Every business that withholds taxes employs workers or operates as a partnership or corporation is mandated to obtain a business ID from the Internal Revenue Service (IRS). A business tax ID is also known as Employee Identification Number (EIN). Like the social security number, every EIN is a nine-digit unique number that helps identify a business.

A business owner must meet their tax obligations. Therefore, you must decide whether to secure an EIN from the IRS when you register with the appropriate state government agency. Fortunately, the IRS makes it easy to get a tax ID number.

Is a Tax Id the Same as an Ein?

A Tax ID and EIN are the same thing but referred to by two different names.
They both refer to a unique nine-digit number.

Here Is How To Secure the EIN for Your Business

The majority of businesses should get a Federal Employer Identification Number (FEIN). Some of the primary reasons as to why a business should obtain the FEIN includes:

Paying state and federal taxes
Opening a bank account for your small business
Hire employees
Applying for business loans and credit
Filing business taxes

Speak With an Accountant

Before you set up your business, it’s advisable to consult your accountant on getting the correct paperwork required to file taxes. For a self-employed business owner, you don’t necessarily require the business tax ID number.

As stated earlier, any business with employees and deals with wages, salaries, taxes, or is a corporation, or operates in partnership requires an EIN. More so, the EIN is paramount for trusts, estates, and NGOs, to name a few. However, sole proprietors can also get the business tax ID number.

Methods To Apply

After the structure of your business is set up, there are a few alternative options to secure your tax ID number:

Your financial institution or accountant might help you get one.
You can opt to make use of the IRS Business and Specialty Tax Line (800-829-4933)
An entity owner can manually fill the Form SS-4 and then mail it to the IRS.
Or rather, fill out the online application form for the EIN by yourself.

Apply for the Business Tax ID Number

You can use the phone, mail, or fax. However, the quickest way is to apply online. After you finish with the short application, you will immediately receive your tax ID number.

You can find the application form via the IRS website, go to the EIN Assistant page, and click on “Begin Application” to start applying. Remember that you should complete the application in one sitting which should only take around 15 minutes maximum. In addition, note that you cannot set the task aside for future revision; therefore, you should create enough time to respond to all the questions.

Suppose you opt to use a telephone; you should reach out to the IRS through (800) 829-4933 and choose EIN from their given list of choices. However, an online application allows you to complete the process, while other approaches may cause delays.

Guidelines and Rules of Your Application

Before you “begin the application,” you should read through the guidelines and rules that govern the applications. Then, a thorough review will allow you to prepare the information you need and complete the process accurately.

Answer All Five Questions

You should answer all five questions correctly. The first one needs you to choose the kind of EIN you intend to apply for; for instance, is it a corporation, sole proprietorship, estate, partnership, or LLC?

Here, you should select an option that describes why you need an EIN. It could be for banking reasons, to start a business or other relevant reasons. Your questionnaire will request a Social Security number and name before you complete the entire application.

Save Your Document

Once you fill out all sections on your online questionnaire application, the system generates your new EIN, and you can start using it immediately. The agency will email you an official document that you get to load and save. It’s a confirmation to show that the online application was a success, followed by your EIN.

It’s advisable to save one copy on your computer or print one for future reference, suppose you forget your EIN. This number is crucial for your future dealings, such as opening an account for your business, filing taxes, or signing contracts.

Here Are Some EIN Tips

Suppose you lose the business tax ID; note that you can call the IRS Business and Specialty Tax Line using 800-829-4933. A representative will ask you to give some information to help identify the authorized person who should get the EIN.

After finalizing the application and assigning you an EIN, note that the IRS will not cancel the number. They never reassign it. But, if you realize that you no longer require the business tax ID number, the IRS agent will close the business bank account upon request, but the number will remain accessible if you need it in the future.

Take Away

Some online organizations offer incorporation services and include a service fee after they get you the EIN. However, you can apply online yourself for free. As earlier mentioned, the simplest and quickest method is to apply through the IRS website.

So, you get to set up your business first since the IRS will ask you to give the legal business name and formation date. When using different agencies to apply for the same business, it’s paramount to give consistent information. For instance, the name you give to the IRS should be the same one you register with another different agency, even punctuation.

Resources

Have a look at the resources included in this post for tips and insights regarding this important issue.

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