One of the most important steps in starting a new business is obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is a unique nine-digit number assigned to businesses for tax purposes. The EIN is used to identify the business when filing taxes, opening a bank account, and applying for business licenses and permits. In this blog post, we will discuss the process of and need for filing with the Internal Revenue Service to obtain an Employer Identification Number.
Determine if You Need an EIN
The first step in obtaining an EIN is to determine if your business needs one. All businesses that have employees, are partnerships, or are corporations must obtain an EIN. Sole proprietors may also need an EIN if they have employees, file certain tax returns, or engage in certain activities, such as opening a retirement plan.
Gather Required Information
Before you apply for an EIN, you will need to gather certain information about your business. This may include the legal name and address of the business, the legal entity type, the name and social security number or EIN of the responsible party, and the reason for applying for an EIN.
Choose a Method of Application
There are several methods of applying for an EIN. You can apply online, by mail, by fax, or by phone. Online applications are the fastest and most efficient method, and you can receive your EIN immediately after completing the application. Mail and fax applications can take up to four weeks to process, while phone applications are only available to international applicants.
Apply for an EIN
To apply for an EIN, you will need to complete IRS Form SS-4, which is available on the IRS website. The form asks for information about your business, such as the legal name and address, legal entity type, and reason for applying for an EIN. You will also need to provide the name and social security number or EIN of the responsible party.
Receive Your EIN
After you submit your application, you will receive your EIN from the IRS. If you applied online, you will receive your EIN immediately. If you applied by mail, fax, or phone, you will receive your EIN by mail.
Keep Your EIN Up-to-Date
Once you have obtained your EIN, it is important to keep it up-to-date. You must notify the IRS if your business changes its legal name or address, or if there is a change in the responsible party. You may also need to update your EIN if your business undergoes a significant change in ownership or structure.
In conclusion, obtaining an EIN is an important step in starting a new business. All businesses that have employees, are partnerships, or are corporations must obtain an EIN. To obtain an EIN, you must gather the required information, choose a method of application, and complete IRS Form SS-4. After you submit your application, you will receive your EIN from the IRS. It is important to keep your EIN up-to-date to ensure that you comply with all applicable tax laws and regulations. By following these steps, you can obtain an EIN and begin your journey as an entrepreneur.
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I am an attorney and Certified Public Accountant serving Southwest Florida.
Previously, I served in operations and finance with the world’s largest accounting firm (PricewaterhouseCoopers), airline (American Airlines), and bank (JPMorgan Chase & Co.). I have also created and advised a variety of start-up ventures.
I am a member of The Florida Bar, and I hold active CPA licensure in Florida and Texas and undergraduate and graduate degrees in accounting and taxation from Southern Methodist University in Dallas.
My practice emphasizes, but is not limited to, the law as it intersects small businesses and their owners. I also assist clients with insurance claims, estate planning, and other legal matters on an ad hoc basis. I live and work in Naples, Florida.
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