The Internal Revenue Service (IRS) requires all businesses to obtain and publicly display an Employer Identification Number (EIN) in order to properly identify the firm and keep accurate payroll records. An EIN is applied for by a business’s responsible party, usually the owner or a top management, who lists both his or her own and the company’s names. For filing taxes and making any other needed company filings, you’ll need to obtain an EIN number, also known as a Federal Tax Identification Number (FTIN).
When Is an EIN Necessary?
If you run a business that employs people or anticipates doing so within the next year;
- if you have a Keogh Plan (a tax-deferred pension plan typically used by self-employed people),
- if you engage in certain activities (like trucking) that are subject to federal excise taxes,
- or if you need a license to do business in your state,
- a Federal Tax Identification Number (FEIN) will be required of you (EIN).
Regardless of whether a firm meets the aforementioned requirements, an EIN is required for corporations and partnerships. In this post from Nolo, you’ll find a comprehensive guide on the situations in which a firm needs an EIN.
It’s possible that you’ll need or want an EIN even if the IRS doesn’t technically mandate it: A business bank account opening may necessitate one. To further lessen the likelihood of being a victim of identity theft, it is recommended that you use an EIN for any business-related transactions instead of your personal Social Security Number.
Obtaining an Employer Identification Number (EIN)
The application process for an EIN is straightforward and free of charge. The IRS accepts applications via the Internet, regular mail, and fax, but the quickest way to receive an EIN is to apply online. Several organizations may submit an EIN application on your behalf for a fee. Applying straight to the IRS will prevent you from having to pay any application fees.
If You Can’t Find Your EIN
The following measures can be taken if you have misplaced the letter you got from the IRS verifying your application and granting your EIN:
- Check out an old tax form. Your EIN will be shown on your tax return if you had one in a previous year.
- Get in touch with your financial institution or government licensing office. If you’ve used your EIN to apply for a bank account or a license for your business, you may verify it by contacting the issuing institution or agency.
Get in touch with the IRS via phone
If you have questions about your business or specialty taxes, you may reach the IRS at 800-829-4933. If you are the rightful recipient and can answer the IRS’s queries about your identity, they will give you the number over the phone.
Changing your company’s name or location typically does not necessitate a new EIN. According to top CFO in India, every time the legal make-up of your company or its ownership changes, though, you’ll need to apply for a new EIN. If you originally registered for an EIN as a single proprietor but then decided to form a partnership, you will need to apply for a new EIN.