How to Apply for an Employer Identification Number (EIN) – NerdWallet

If you own a minor business, you ’ ll likely necessitate to apply for an employer recognition act, besides known as a business tax ID count, at some distributor point. An employer identification number, or EIN, is a nine-digit numeral assigned to your party by the IRS, and you use it when filing your commercial enterprise ‘s income tax return or payroll tax return. An EIN besides comes in handy when opening a business bank account, applying for a business credit card or applying for a business lend. If you ‘re looking to get an EIN, the adept news is that the application process is easy and free. You can apply online on the IRS ‘ web site or by chain mail or facsimile. ( International applicants besides have the choice to apply by earphone. ) You only need some basic bits of information about your clientele in order to apply.

How to apply for an employer identification number in 3 steps

ideally, you should apply for an EIN when you first launch your occupation, but you might besides be applying in time for tax temper or to submit a clientele lend application. The application process is release through the IRS, so be leery of companies that charge you to apply for an EIN on your behalf.

Follow these simpleton instructions to apply for an employer identification number.

1. Determine your eligibility for an EIN

There are two basic requirements that must be met to apply for an employer recognition numeral :

  • Your principal occupation must be located in the U.S. or U.S. territories .
  • The person applying must have a valid taxpayer identification phone number, such as a Social Security total .

Your principal business is determined by identifying the chief income-generating natural process that you do ( e.g., adviser, engineer, sophisticate, car animate shop ) and your chief physical localization. just because you provide services outside of the U.S. doesn ’ t necessarily mean that you don ’ triiodothyronine meet the eligibility requirements. american samoa farseeing as your basal clientele activities are in the U.S., you are eligible to apply for an EIN. The person who submits the application does n’t need to be the business owner. The applicant can be a collaborator or officer of the caller. The IRS allows any “ responsible party “ to apply, which they define as anyone who manages the company ‘s finances. Another person, such as a secretary or assistant, can besides apply provided that a creditworthy party signs Form SS-4 and fills out the third-party designee department.

2. Gather the necessary information

You should start by reviewing the PDF version of Form SS-4 : application for Employer Identification Number. That direction, you can ensure that you have all the want information fix, such as names, addresses and the Social Security number of the responsible party. You ’ ll need to know what type of business entity your ship’s company is, and if your commercial enterprise is a pot, you ‘ll have to put down the department of state or nation where you incorporated. If you have a multi-member LLC, make certain you know the phone number of members. early information you ’ ll need to complete the application include :

  • Primary cause for applying ( for example, launching a business, banking purposes, hiring employees, etc. ) .
  • Date you started or acquired your business .
  • primary industry, along with a description of your primary merchandise or servicing .
  • Highest number and type of employees you expect to employ during the future 12 months .
  • first date wages were or will be paid in your business .
  • Closing month of your account or fiscal year ( typically December if you are a calendar-year taxpayer ) .
  • Whether you ‘d like to file an annual employer tax return alternatively of a quarterly employer tax reelect if you pay your employees $ 4,000 or less in wages in a calendar year. ( Consult your accountant for this separate of the application. )

By reviewing and filling out Form SS-4, you can make surely you have all the information you need cook to go before you begin the on-line application process.

3. Apply for an EIN online or by mail or fax

The IRS has a few options to apply for an EIN. You can apply on-line, by facsimile or by mail. Applicants who are presently abroad and seeking to immigrate to the U.S. for business purposes can besides choose to apply by call. For all U.S.-based applicants, the on-line application is the easiest and fastest method acting. For the on-line application, the IRS ‘ on-line EIN adjunct offers an easy bit-by-bit human body. The on-line application is available Monday through Friday from 7 ante meridiem to 10 post meridiem EST. The adjunct walk you through the lotion process and provides links to help resources and other information. Keep in thinker that you ’ ll mechanically be logged out of the arrangement after 15 minutes for security reasons, and each responsible party is merely able to apply for one EIN per business day. If you use the IRS ‘ on-line application, you will receive your EIN immediately once you electronically submit your application. Fax applications take four business days to process. Mailed applications take four weeks. Should you choose to get an EIN via fax or mail, you ‘ll have to send in the completed Form SS-4.

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Why you should apply for an employer identification number

many humble businesses are required to get an EIN for tax purposes. Any clientele that has employees is required to have an EIN to pay and file payroll taxes for their employees. In addition, businesses that are structured as partnerships, corporations or multi-member LLCs are besides required to have an employer identification number to file a business income tax return. The alone types of businesses that do n’t need an EIN are sole proprietorships with no employees and single-member LLCs with no employees that are taxed as ignore entities. If you fall into one of these categories, then you can use your Social Security act when filing income taxes rather of an EIN. Certain specific types of organizational structures besides require an EIN. If your organization is defined as any of the pursue types, you ’ ll need to apply for an EIN careless of whether you have employees :

  • Trusts, except certain grantor-owned revocable trusts, IRAs and Exempt Organization Business Income Tax Returns .
  • Businesses that pay excise, alcohol, tobacco or firearm taxes .
  • Businesses with a Keogh plan .
  • Estates .
  • substantial estate mortgage investment conduits .
  • nonprofit organizations .
  • Farmers ‘ cooperatives .
  • plan administrators .

Keep in heed that even if the IRS does n’t require you to get an EIN, U.S.-based businesses have the choice to apply for one. And getting one comes with several benefits. Having this identifying number allows you to separate your clientele and personal finances and easily apply for business credit, open a business bank account and make with suppliers without having to use your personal Social Security number.

Will I ever need to change my EIN?

here are some common situations in which you ‘ll need to apply for a new EIN :

  • Your occupation social organization has changed. For example, you ‘ll need a newfangled EIN if you are a sole owner and decide to incorporate or take on a spouse in your occupation .
  • You are discipline to a bankruptcy proceeding .
  • You purchase an existing business or inherit a business that you operate as a sole proprietorship .

If you are merely changing the name of your business or opening a new location for your existing commercial enterprise, you broadly won ’ t need to reapply for an employer recognition number.

What if I lose my EIN?

If you lose or misplace your EIN, no indigence to panic or run out and apply for a raw one. There are a phone number of ways to look up your clientele tax id :

  • Find the computer-generated notice you received when you applied for an EIN .
  • If you opened a bank account using the EIN, contact your bank to retrieve it .
  • Find your EIN on a previously filed tax rejoinder.
  • many business service providers require your EIN when you sign up for services, such as indemnity companies, merchant service providers or your tax professional. You could reach out to one of these to see if they can provide it .
  • Contact the IRS Business & Specialty Tax Line during business hours if you ‘re ineffective to find your identification phone number through other methods .

This article primitively appeared on JustBusiness, a subsidiary company of NerdWallet .

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Category : Finance

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