Starting a New Business: Obtaining Your Federal Business Tax ID (EIN)

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An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number, and is used to identify a business entity. It is very standard, and pretty much every business will need an EIN. You can apply for an EIN in various ways  including online.

Do You Need an EIN?

If you answer “Yes” to any of the following, you will need an EIN number.

  • Do you have employees?
  • Do you operate your business as a corporation or a partnership?
  • Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
  • Do you withhold taxes on income, other than wages, paid to a non-resident alien?
  • Do you have a Keogh plan?
  • Are you involved with any of the following types of organizations?
  • Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
    • Estates
    • Real estate mortgage investment conduits
    • Non-profit organizations
    • Farmers’ cooperatives
    • Plan administrators

Do note that starting in May 21, 2012, the Internal Revenue Service limits Employers Identification Number (EIN) issuance to one per responsible party per day.

How to Apply for an EIN

Before applying for an EIN remember that it is a free service offered by the Internal Revenue Service. Beware of Web sites on the Internet that charge for this free service.

If you are a home-care service recipient who has a previously assigned EIN either as a sole proprietor or as a household employer, do not apply for a new EIN. Use the EIN previously provided. If you can not locate your EIN for any reason, follow the instructions on the Lost or Misplaced Your EIN? IRS web page. The following are instructions provided on the IRS website:

Apply Online
The Internet EIN application is the preferred method for customers to apply for and obtain an EIN. Once the application is completed, the information is validated during the online session, and an EIN is issued immediately. The online application process is available for all entities whose principal business, office or agency, or legal residence (in the case of an individual), is located in the United States or U.S. Territories. The principal officer, general partner, grantor, owner, trustor etc. must have a valid Taxpayer Identification Number (Social Security Number, Employer Identification Number, or Individual Taxpayer Identification Number) in order to use the online application.

Apply by Telephone – International Applicants
International applicants can call 267-941-1099 (not a toll-free number) 6:00 a.m. to 11:00 p.m. (Eastern Time) Monday through Friday to obtain their EIN. The person making the call must be authorized to receive the EIN and answer questions concerning the Form SS-4 (PDF), Application for Employer Identification Number. Complete the Third Party Designee section only if you want to authorize the named individual to receive the entity’s EIN and answer questions about the completion of Form SS-4. The designee’s authority terminates at the time the EIN is assigned and released to the designee. You must complete the signature area for the authorization to be valid.

Understanding the EIN

For more information about the Employer Identification Number you can download the “Understanding the EIN” provided by the IRS.

You will be asked often for your EIN as you continue to do business, so don’t hesitate to get one set up as soon as possible before doing any business. Remember, it’s free and is fairly simple to do – so you really don’t have much of an excuse not to.

2017-06-04T15:03:39+00:00 August 15th, 2017|Business, Recent|

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