Whether you are applying for the first time or because you are changing your company entity, obtaining an EIN is easier than it sounds. Here is what you need to know about an EIN as well as the process of obtaining this important number.
What Is an EIN?
The Employer Identification Number (EIN) is essentially your business Tax ID that is comparable to a social security number for businesses. Like an individual social security number, the EIN is a nine-digit number that serves as a social security number for your business for tax purposes. You can use your EIN to file taxes and even open a line of credit for your company.
Who Needs an EIN?
If you start a business and plan to hire employees, you will need to obtain an EIN for your company. In many cases, individuals who have single person run businesses will choose to apply for an EIN to separate themselves from their business for professional purposes. In most cases, a given EIN will remain with your company indefinitely. However, companies that change their entities such as moving form sole proprietorships to limited liability corporations or partnerships, will need to apply for a new employer ID number.
Applying for Your EIN
In order to obtain your federal Tax ID, you must fill out Form SS-4, which is sometimes called the Tax ID application, or EIN application. The easiest way to complete your tax ID application is to do so online through a reliable source like Gov Doc Filing. You also have the option of completing your application on paper and submitting it via fax or mail. However, faxed or mailed forms will take several weeks to process. Meanwhile, an online application can be processed within days. Whether you are applying online, or by fax or mail, you should compile your business documents and set aside time to attentively complete the SS-4 for best results.
Obtaining an EIN requires a bit of time. However, the process itself is fairly direct and straightforward.