How to Apply for an EIN
If you’re just starting a new business, there are a host of different administrative tasks you need to undertake. It may seem like you have a mountain to climb in terms of paperwork. But the entire process can be made much easier if you have a good roadmap to begin with. An EIN is something you will have to apply for if you’re starting your own business. It stands for Employer Identification Number. Having one of these will be necessary when it’s time to pay your taxes at the end of the financial year.
This guide has been created to help our readers better understand the EIN and what it’s used for. You need to be certain that you have a full understanding of this number and how it has the potential to impact your business. Not properly applying for an EIN can result in a massive headache at the end of the year. Make sure to read all the content in this article to ensure that you’re prepared to apply for your EIN.
An EIN is a simple 9-digit number that you will need to conduct business inside of the United States. The IRS requires you to have this number, as they want to be certain that correct earnings are attributed to you and your business. It’s a method they use to ensure that everyone pays the right amount of tax while they transact business. An EIN is effectively considered the Social Security Number of the business world.
Do I Need One?
If you own any form of business you need an EIN. It doesn’t matter what form of business you operate – even nonprofits need EINs, despite their tax exemption. Business types include, partnerships, LLCs, corporations, entities, and other forms of businesses. Not all sole proprietors will need an EIN, but some will. You should head to the IRS website to see if you’re someone who needs to have this form of identification number.
Regardless, even if you find you don’t need an EIN, it can sometimes be advisable to get one anyway. It makes the entire process of getting paid much easier. If you don’t have an EIN, you may have to end up giving your social security number to your clients all the time – this can be a security risk.
Will it Cost Me Anything?
The best thing about EINs is that they cost you absolutely nothing. You don’t need to pay a dime to obtain one – so don’t get tricked into paying for one. Many business services will offer to process your EIN for you, they’ll make it seem like you’re getting a good deal. While you may prefer to pay someone to do it to take the hassle out of the project, don’t be convinced that you can’t do it yourself for free.
The IRS understands how important it is to make applying for an EIN accessible for everyone.
What Do I Need?
You don’t need much to apply for an EIN. You’ll want to make sure that you have all your personal information in order, as well as the basic information about the business that will be using the EIN.
To apply for an EIN, you need to have a taxpayer identification number. Your business must also be based in the United States.
The application process can be quite painless if you approach it the right way. The best way to apply is to head to the IRS website and use the EIN assistant. Here you will be able to input all your information into the online portal – it will process the information on the spot. You will then be immediately issued with an EIN – you don’t have to wait weeks for processing or mailing.
If you don’t want to apply online, the IRS does allow you to fill in a form that you can find on their website. The form is titled ‘Form SS-4’. You can choose to either fax or mail this application. Mail applications take about a month to process. While most fax applications take a little less than a week. As you can tell, the quickest option is to apply online through the EIN assistant portal.
Keep in mind, your EIN does not expire – once you have it issued, you’ll never have to renew it!
What if I’m Based Overseas?
If you’re based overseas, but you want to apply for an EIN for a US based company, you won’t be able to use the above methods. You will need to call the IRS to apply. It’s very important that you apply for an EIN if you’re operating a US-based company, even if you’re out of the country. You can contact the IRS at 267-941-1099 (M-F – 6:00 AM – 11:00 PM EST).
After reading this guide, you should have a firm understanding of what an EIN is, and how it is relevant to your business. As mentioned previously, it’s vital that you have one of these identification numbers if you’re operating a business based in the US. If you’re not sure if you need an EIN, make sure to check the IRS website before you decide not to apply for one.
Remember, an EIN is only one of a number of different things you need to sort out before you start operating as a business. You need to make sure that you understand how important it is to have all your affairs in order from the start – it will save you from headaches down the track.
Our website has a lot of really informative content on how to start a business. We provide our readers with comprehensive guides on different business related topics. We’re experts at helping small business owners find the answers to questions they have. If you need funding information, we’re one of the top resources in the industry on business lines of credit. Make sure to check out some of our other content before you leave our site!
Michelle worked at a teller at her local bank while she was earning her degree in economics. Then, after completing an MBA, she came back to the bank as a loan officer. As a result, Michelle is uniquely suited to providing advice to small businesses when it comes to selecting the best loan and credit products.