You own and operate a business then you may need to have a federal employer identification number. Commonly referred to as federal tax id number EIN is like a social security number. The government and financial institutions etc. use your social security number to identify you as a unique individual. Similarly, EIN is used to identify a business as a unique entity by the tax agencies and government, etc. Employer identification number is a smart way to differentiate between your personal and business liabilities. You can get the tax id number application online as well. EIN is issued by IRS and is used by:
- Employers
- Corporations
- Partnerships
- Non-profit organizations
- Sole proprietors
- Government agencies
- Certain business entities
Reasons To Apply For EIN:
Why do you need to apply for tax id? Let’s reveal the reasons:
- Started a new business
- Opened an account and bank requires you to supply EIN
- Need to open a business bank account
- Start a business line of credit
- Formed a trust
- Created a pension plan, partnership, LLC or a trust
- Changed the legal character of your organization
- Changed the ownership of the organization
- Represent a business after owner’s death
Do I Need An EIN?
You are an individual who hires employees then you need EIN. A business entity that has employees must have an employer identification number for tax purposes. The sole proprietors use their social security number. However, they can also obtain the EIN for the business purposes. The process of filling the federal tax id application is not that complicated. You can apply for your EIN online, by phone, fax or mail. The fastest way to get the employer identification number is through the internet. Do not provide any wrong details while filling the application form. You need to a quick as if the session remains inactive for 15 minutes you need to start it again.
