Social Security Number is used for all identification purposes while EIN is specifically for business use and in that too, for taxation purposes. It is compulsory for any business entity to get an EIN from IRS if any of the following conditions apply to his/her business.
- If it is a business body that has hired employees
- The structure of the business in corporation or partnership based.
- If your firm withholds income taxes on income of your employees.
- The business has a Keogh Plan
- If your business deals with organizations which are listed on the IRS website.
The basic use of EIN is in taxation whereas it can be used for other purposes as well, for example, creating a business bank account in your business name or getting credit cards and business permits in the name of your business.
When using your EIN for business interactions, you are at a lower risk of identity theft. This number can be given out to clients and employees without the fair of getting your identity stolen which would have been a serious concern if you were giving out your Social Security Number. EIN should be used for tax issues in business and not for lotteries or auctions etc.
If you run a corporation or a business and desire to have your account opened in banks, credit unions or other financial institutions in the name of your business, then need to have an EIN to achieve that.With the EIN in hand, you will be able to manage taxes such as income taxes and withholding taxes which will be a part of the incomes of your employees. Furthermore, you can create your own business account on the name of your business using your EIN. For other identification purposes, you should use your Social Security Number while for business related activities EIN is to be used.
Getting an EIN number has been made quite easy by IRS. The fastest way to get it is to go on the IRS website and fill in the online application form which is uploaded for this purpose. Please make sure that you do not leave any spaces unfilled which are mandatory. Also, note that improperly filled forms can lead to a delay in getting your EIN which is not what you would want. Once your online application is submitted, your data will be verified and you will be issued an EIN in the same session. Before 2001, the first two digits of an EIN represented the location in which the business was registered but that has changed now. EIN issuance is now centralized at three IRS campuses and so any of those campuses can issue your EIN. If rendered necessary, all the 10 campuses of IRS will issue you your EIN.
If you are uncomfortable with applying online, then you can fax or even mail IRS the filled application form and get a response from them in the same way, though these methods of application can be relatively time-consuming.
There is a special provision for International applicants as they can directly call the IRS office at 267-941-1099 for the issuance of their EIN. Please note that this number is not toll-free and call charges will be applicable. The timing for the call should be between 6 am to 11 pm, Eastern Time. The office is open to serve you on working days, that is, from Monday to Friday. If the applicant himself/herself is not making the call, then he should authorize the caller to fill his form through tele-conversation on his/her behalf. To do this, the caller must have the required information of the applicant so that it can be conveyed verbally to the IRS office representative. The authority goes null and void once the applicants receive the EIN and sign it and acknowledge its receipt.
If your business is a start-up and you have hired employees, then it compulsory for you to get an EIN number. However, if the people who work for you are not your employees and are rather independent contractors, then you do not require EIN. You need to understand the laws regarding taxes when you are running a business, whether is to be an old one or a start-up. Furthermore, if your business is generating income or not, you still need to file your tax returns and so require an EIN. Getting an EIN number is the first thing on your checklist when you are having a start-up business underway. Getting an EIN is a mandatory requirement for all those business owners or firms which have hired employees, are dealing with organizations listed on IRS website and/or are run as corporations or partnership based businesses. The same condition applies if your business withholds taxes on income or has a Keogh plan.
With the EIN in hand, you will be able to manage taxes such as income taxes and withholding taxes which will be a part of the incomes of your employees. Furthermore, you can create your own business account on the name of your business using your EIN. For other identification purposes, you should use your Social Security Number while for business related activities EIN is to be used.
A business account run by an EIN and other personal accounts that you may have run by your Social Security Number will help you not mix business amounts with your personal ones. EIN is also safe to give to your business associates or clients as they cannot steal your identity using it which can otherwise be done if you disclose your Social Security Number to other people.
You should apply for an EIN once you are starting up your business. There are various ways in which you can do that. The easiest and the fastest way is to submit an online application on the Internal Revenue Service website. Please note that issuance of EIN is a free service provided by the IRS. You are to duly fill the application form on their website and submit it. Please make sure that all the mandatory information is filled and that all information is true and valid. Wrong data or incomplete form can result in delays in the issuance of your EIN. Once you have submitted the application, it will be verified and you will be issued an EIN in the same session.
You can also apply for an EIN through fax. The procedure is to fill the form with requested information and fax it to the IRS office. If your form is complete and your data is matched, you will get your EIN faxed to you on the fax number conveyed to them by you. You can expect your EIN to be faxed to you in four working days from the time of application.
The application form can also be mailed to the IRS office for issuance of EIN. You will be required to fill a form and mail it to them and you will get the EIN in your mail after verification and approval. This process is relatively slow and can take up to four weeks.
International applicants can directly call the IRS office at 267-941-1099. Please note that this number is not toll-free and call charges will be applicable. You can call between 6:00 a.m. to 11:00 p.m. Eastern Time. Your call will be attended and addressed on all working days i.e. Monday through Friday. The person making the call to IRS must be authorized by the individual getting the EIN and should also have the necessary information required to fill the application form. Once the owner gets the EIN and signs it, the authority given to the middle-man automatically ends.
You need an EIN if you are the owner of a business which employs any number of people. The need for an EIN is irrespective of the number of people employed. Also if the business you are running is a corporation or partnership-based, you need to get yourself an EIN issued. EIN is primarily used for tax returns, so if you are a filer of employment, excise, alcohol, tobacco or firearms tax returns, then you must have an EIN. Other than wages paid to your employees, if you withhold taxes on incomes which are paid to a non-resident alien, then you need to have an EIN. Any individual or business having a Keogh plan must also have an EIN. Apart from this, if you have involvement with any organization which is listed on IRS site then you must have an EIN. These organizations may be trusts, estates, non-profit organizations, farmers’ cooperatives or plan administrators. EIN is safer than SSN as it can be shared with business associates, given to employers or clients, and even uploaded on the web without the risk of getting your identity stolen. In a way, it is a better replacement of SSN, though it does not serve all the purposes of SSN.
How to Get a Federal Employment identification Number?
EIN is issued by the Internal Revenue Service (IRS) and is free of charge. One must be careful of the websites internet that charge for this free facility. There are various ways to apply for your EIN which are listed below:
The easiest way to get your EIN is by applying online. You will be required to fill an online form with the required detailed. The completed application form can be submitted and is verified during the same online session and an EIN is issued. The eligibility criterion to get an EIN is that your business, office, agency or legal residence should be in the United States or United States territories. To use this online application, you must have a Social Security Number.
Apply by Fax
Similarly, the application form can be duly filled and faxed to the concerned office. Make sure that the form is filled with all the required data and no mandatory blank is left out. If you provide your fax number along with the application then your EIN will be issued to you via fax within 4 working days given that your form was complete and no discrepancy was noted.
Apply by Mail
You can also apply to get your EIN by sending them a mail. Please note that this method is time-consuming as compared to the others as it takes 4 weeks to process an application and issue the EIN using the mail method to apply. Please make sure that the Form SS-4 is completely filled and no mandatory information required is left missing. Upon verification and processing, your EIN will be sent to you through your mail.
Apply by Telephone – International Applicants
There is a provision for International applicants that they may apply for their EIN by calling the IRS on their designated number 267-941-1099 (not a toll-free number) 6:00 a.m. to 11:00 p.m. (Eastern Time) Monday through Friday. The person making the call must be authorized to receive the EIN and must have the information required to fill the form and must be able to convey it across.
To fall in the category of small business, you must be either self-employed or be operating a small business with hired employees or independent contractors. The difference between an independent contractor and an employee needs to be understood. You must clearly classify your workers either as independent contractors or employees. This is essential as the forms to be filled for these two classifications are different and so are the tax rules. You do not need an EIN if the people working are you are independent contractors and not employees.
If the person working for is you is an independent contractor then you should refer to the “Forms and Associated Taxes for Independent Contractors” link on the IRS website to know about your tax responsibilities and liabilities. It can get a bit tricky to determine if one is an independent contractor or an employee. To achieve this distinction, information is available in Publication 1779- “Independent Contractor or Employee?” which is uploaded on IRS website for information.
To determine the status of a worker as an employee or an independent contractor, three factors can be considered which are behavioral control, financial control, and relationship of the parties. These are dealt under the common law.
In the other case, that is, the worker is your employee, you must get an EIN and your tax responsibilities would include withholding, depositing, reporting, and paying employment taxes. Certain forms will be given to you by your employee and vice-versa, while you both will need to submit some form to the IRS and SSA offices. You can share your EIN number with your clients or employees as doing this does not pose an identity theft risk, which is the case when sharing your Social Security Number with someone.
If you run a business in which you have employed your spouse, then your spouse is not considered a partner in business and you, the employer, are to pay his/her social security taxes and also Medicare taxes. The wages of such an employee are liable for income tax, withholding tax, Medicare and social security taxes but are exempted from paying FUTA tax. If you require more information regarding this issue then please refer to “Publication 15, Circular E, Employer Tax Guide” which is available on the IRS website. EIN is to be used to file tax returns for such businesses which have employed workers.
If you are self-employed and want to get started with the process, the easiest way to go about it is by visiting “Self-Employed individuals Tax Center” are on the IRS website. You will get all the information you need regarding your tax responsibilities.
There are various forms and publications available on the IRS website which provides ample assistance for small business owners or self-employed individuals. This information can also be gained by calling (800) 829-3676 and ordering the relevant material through your mail.
For those entrepreneurs who are looking to start a business, it is important that they first read and understand about the taxes they would be responsible for paying. This information can be gathered from “Starting a Business” section on the IRS website.
A special nine-digit number is allotted to business bodies in the United States for the purpose of identification. This number is called the Employer Identification Number (EIN). It is also better known as the Federal Employer Identification Number (FEIN). Sometimes it is also called the Federal Tax Identification Number (FDIT). The issuance body is International Revenue Service (IRS). It is called the taxpayer Identification Number (TIN) when it is used solely for identification purpose while it is called Employer Identification Number (EIN) when used for reporting employment taxes.
It is mandatory for a business firm to acquire an EIN number if any of the following conditions apply to it.
- If the business firm has employed employees.
- If it is a corporation or a partnership run business.
- Your business withholds taxes on income.
- The business has a Keogh Plan
- The business firm has involvement with firms that are listed on IRS website.
The primary role of EIN is in taxation facilitation, though it is used to serve multi purposes. It can be used for opening an account in the name of business, getting a credit card on the name of the business, applying for business permits or furnishing independent contracts.
The EIN also serves to reduce the risk of identity theft. Instead of using one’s Social Security Number (SSN), one can disclose EIN to his/her clients. This way the clients cannot access personal accounts of the individual disclosing EIN and so is less likely to fall a prey to identity thieves. The EIN should be used for tax-related issues and must not be used for lotteries, auction sales etc.
Banks, credit unions, brokerage houses and other financial institutions do not open an account for a cooperation that does not have an EIN. It is mandatory as all corporations, whether generating income or not, must file their tax returns for which EIN is required.
Prior to 2001, the first two digits of an EIN (the EIN Prefix) indicated the business was located in a particular geographic area. In 2001, EIN assignment was centralized at three of the IRS campuses, although all 10 campuses can assign an EIN, if necessary.
It is a misconception that credit bureaus and credit issues cannot tell the difference between Social Security Numbers and Employer Identification Number. Fraud can be detected by the credit bureaus using special complex algorithms. Therefore, EIN is not considered a sensitive number and can be issued to publications and may also be uploaded on the internet.
The usual format of writing EIN is formatted 00-0000000 as opposed to SSN which has the format which is written in the form 000-00-0000. This format can distinguish EIN from SSN. Before 2001, the first 2 digits of an EIN represented the area in which the business was located. This is not the case now as EIN issuance was centralized and primarily three IRS campuses issue EIN. It may also be issued from all the 10 campuses if considered necessary. Furthermore, decoders using the web can identify the state in which the EIN was issued. EIN can only be issued once to an entity and cannot be re-issued. It is issued for a lifetime and does not have an expiry date.
The Hidden Truth About EIN Number
You can readily get your number by completing the application form furnished by irs.gov. Additionally, you will have to obtain an EIN number from the IRS if you’re likely to seek the services of workers. Besides that, additionally you will have to obtain an EIN number.
Although it is popularly known as an Employer Identification Number (EIN), there are instances when you might require an EIN even though you don’t have workers. So as to finish this form you will also have to submit an application for an Individual Tax Identification Number (ITIN) if you’re bidding in your name.
The Upside to EIN Number
There are several strategies to getting an EIN. Go to IRS.gov for more info about whether you are going to want an EIN. Still, you might desire to procure an EIN anyway. Make certain you have your EIN before you should submit a return or earn a tax deposit.
The Ultimate EIN Number Trick
Your entire comprehension of the domain and suitable use of the resources is the secret to business success. To begin with, you will have to register your company name with the city government. You need to think about a distinguishing name for your organization. It was an perfect name for my organization and it stood out.
Get the Scoop on EIN Number Before You’re Too Late
Be certain you get a business debit card and review all the extra services that you can accentuate your account, together with any balance conditions and continuing maintenance fees. Thus, the secret to establishing individual small business credit is to locate businesses that will issue it to your small business without using your own personal information and report the payment expertise to the small business credit agencies.
Additionally, you will have to locate liability insurance to distinguish your private wealth from your business one. Should youn’t have insurance, you’re taking an enormous danger as just 1 mistake can send your business into insolvency. You’ll need to receive a workers’ compensation insurance jointly with a liability insurance.
Finding the Best EIN Number
A fast and effortless method of start in a company would be to buy a franchise. If you properly advertise your company, you should not have any problem obtaining a contract for work signed. As soon as your firm gets an EIN, you ought to carefully consider whether you’re fulfilling all the US tax filing duties that accompanies the number.
Additionally, if it’s in among the following sectors then you will need to start an account in person instead of online. A business and company law attorney has the capacity to answer questions particular to your business wants, help you submit an application for an EIN, and more.
Go at your own pace and do your research very carefully because you wish to be sure you and your small business are guarded under the most suitable small business structure. When your company grows popular, effort to commit your capital towards competitive marketing to acquire an increasing number of customers. Merely apply for SBA 8A system and get the support that it deserves. Very well in case you treat your new organization like an actual business. Beginning a home-based company on the world wide web is easy you say.
Apply Online Today @ Tax-ID-Number-Online.com | Tax ID Number
Where many people can begin to feel overwhelmed that’s. Getting going is really simpler than you may believe, although it’s clear to freeze up at the deluge of stuff which are expected to get a company started.
Like every large target, by breaking it down into smaller jobs, in case you start, you’ll have the ability to handle enough of the activities required to begin.
1. Compose a one page business plan.
The key to a successful small business, particularly in the startup stage, would be to keep costs low and things easy. Prices don’t only mean your time, but in addition your financial prices.
You’re just going to want that if you’re seeking lending or investment, and in the event that you’ll be seeking both of these matters down the street, I urge small business owners start out with by testing their thoughts first prior to investing tons of cash plus time.
Connected: You Must Really Understand Yourself Before Beginning a Company
Therefore to begin, produce your own straightforward, one page business plan that’s a high level summary of the small business you’re about to begin.
- What’s going to be the outcome of your company?
- Distinct to a vision, your assignment should describe the reason your business exists.
- What exactly are you currently going to do — what are your targets — that’ll cause the achievement of your eyesight as well as your mission?
- Summarize your fundamental strategies. Are you going to attain the goals you only bulleted?
Compose an easy action plan. Bullet out the smaller job-oriented activities needed to reach the stated goals. That’s it. It may be longer than one page, but nevertheless, it’ll certainly be briefer when compared to a complete business plan, which might take weeks to compose and more organized.
2. Choose a budget.
You have to establish a budget to begin and how much you’ll have the ability to spend while I highly recommend you maintain your prices as low as possible. Be realistic about amounts if you’re self financing and anything your financial plan to be is anticipated by you.
Your burn rate is the way much cash you over month.
The first 30 to 90 days you ought to set up your company with profitability in head. It’s not impossible. If things go more slender than anticipated, but have a budget reservation so you could live.
3. Choose a legal thing.
Filing paperwork to begin a company costs cash. Frequently, depending in your state, it could be plenty of cash. You’ll should account for municipality or city licensing, state incorporation or company thing fees and much more. Do an exhaustive investigation beforehand to find out what the filing fees are before commencing any company, for your city, county and state.
That may save you some big time cash while you discover the viability of your organization.
Once you’ve shown in the very first three to six months of company that you’ve got a model that is workable, sustainable you always have the option to file for a small business thing.
Connected: When Starting a Small Business, Beware Regulations and Every One Of the Taxes
4. Take good care of the cash.
Whatever company thing you choose, keep the money separate from your personal accounts. This is really a huge error which makes financials and tax time confusing. It’s extremely simple to set up a business checking account that is free with bank or your local credit union.
Don’t pay for an account or get any type of credit lines simply get a holding area you’ll be able to keep your cash distinguished from your personal accounts. This ought to take you in the financial institution of your choice.
5. Get your web site.
No matter whether your company is going to be on the internet or mortar or brick, you’ll want a web site and that means fixing a URL.
6. Evaluation sales.
You’ve enough of a foundation you could start examining some sales. Attempt to spread the term in ways that are creative and cost-effective.
Should you’ve got a product-based company, examine the utility of your merchandise at local swap meets, farmers markets or alternative community events to examine precisely what the people actually believes (and when they will buy) from you.
Drive visitors to your web site through straightforward Facebook Advertising with budgets that are capped, or set up an easy Google AdWords account using a budget cap if traffic is going to your web site to examine.
It’s possible for you to follow these six steps for not lots of cash by yourself. It’s a great strategy before throwing all your time plus cash into an unproven notion to check the utility of your business.
We suggest confirming your preferred business entity name is available with your Secretary of State prior to filing your federal Employer Identification Number application online. Apply for your EIN Number Online: https://www.federal-ein-application.com/irsein/ss4-online/ – ss4 online
You can easily get your number by completing the application form provided by irs.gov. Itis a number you file your taxes you must use.
There is no enrollment of an organization in a different state or California. The fee changes based on matter. It really is essential that you only’re not uncomfortable with the payment. Making the credit of your organization is as critical as building your credit that is private. Then you undoubtedly do not need it to hold your business back from success when you’ve got poor personal credit. Creating company credit is not easy. The fastest solution to set up your organization credit would be to start a company charge card.
In the event you be using the Service through the site and link to some other web site, you will leave the site and this Policy will not be significant for your use of and actions on those other sites Beginning a home based business on the world wide web is simple you say. The filings may frequently be finished as you wait in the event you decide to see the office in person.
Consider your selections carefully and remember in the event that you need clarifications which you always possess the option to request the people at the State Department Office for assistance.
Nothing if you do not send it and the contour only cost the postage. Itis easy to file and a real straightforward form. All you have got to do is complete the application form also you may availability support and that they’ve online
It’s possible for you to start the enrollment procedure return to complete your registration and save a draft. Please touch base with us in the event that you’d rather start the process for applying for your EIN number. On line application costs merely simply just a little more.
In states that are distinct, another plan is required. Choose your business type below to identify what information which you merely ‘ll should successfully complete your registration application. Applying for EIN number is not a complex process in any manner.
When it is fully used for id after it’s used to report business taxes and it’s called the Tax Identification Number, it is called the Employer Identification Number. The information vital to fill the application form that is crucial is not actually complex. You may demand a web site for your business you’ll be able to see our Contact page and complete the form. Unique advice must be offered by you on the basis of the taxes for which you are registering along with the sort of firm.
It is not impossible to learn more information concerning the process for obtaining a certification of great standing online. It’s strongly suggested that you select online.
The EIN strategy was created by the IRS in 1974 by Treasury Decision (TD) 7306, 39 Fed. Reg. 9946 . The ability for EIN’s is derived from 26 USC 6011(b), requiring citizen identification with the aim of payment of employment taxes. The provision was first enacted in 1954 as part of the revision of the Tax Code. 26 USC 6109 expanded in 1961 this ability. There are EIN Decoders online that can identify in what state the company registered the EIN.
A business needs an EIN in order to pay employees and to file business tax returns. To be considered a Venture, LLC, Corporation, S Corporation, Non-profit, etc. a business must obtain an EIN. Also, financial institutions for example brokerage houses, credit unions, and banks Won’t open an account for a corporation without an EIN.
Since all corporations – including ones with no income – must file at least a federal income tax return, a corporation incorporated in the United States or managing generally must obtain an EIN anyhow before or after being issued its charter.
Although all 10 campuses can assign an EIN, if required, in 2001, EIN assignment was centralized at three of the IRS campuses.
Employer Identification Numbers
Employer Identification Numbers must be not used for any other purpose and are used for tax administration. For example, EIN should not be used in tax lien auction or sales, lotteries, etc.
Other Names For EIN Numbers
Also referred to as the Federal Employer Identification Numbers (FEIN) or the Federal Tax Identification Number, the EIN Number is an unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for the purposes of identification.
Similar in function to the Social Security number assigned to individuals, EINs are used by companies, sole proprietors, corporations, partnerships, non-profit organizations, trusts and estates, government agencies, certain individuals and other business entities. The IRS uses this number to identify.
Individuals who are employers may select to either use their Social Security number with the aim of reporting taxes withheld on behalf of their employees or obtain an EIN.
Contrary to some misconceptions, credit bureaus and credit issuers can tell the difference between EIN and SSN numbers. SSN numbers can be validated as to state and source /year of issuance. Issuers and the credit bureaus are exceptionally trained in fraud detection, and increasingly refined algorithms and protections are used.
This is the reason many businesses isn’t considered sensitive information, and freely distribute the EIN by way of the net and publications.
EIN Number Format
Reg. 9946 . The power for EIN’s is derived from 26 USC 6011(b), demanding citizen id with the aim of payment of employment taxes. The provision was enacted in 1954 as part of the revision of the Tax Code. This power was extended in 1961 by 26 USC 6109.
An EIN is usually written in the form 00-0000000 whereas a Social Security Number is usually written in the form 000-00-0000 in order to differentiate between them both. There are EIN Decoders on the internet that can identify in what state the company filed the EIN.
An EIN is needed by a company in order to pay employees and to file business tax returns. To be considered a Venture, LLC, Corporation, S Corporation, Nonprofit, etc. a business must obtain an EIN.
Those business that do not are considered proprietorships and the Owner / Operator SSN is used on any tax files. Additionally, financial institutions such as credit unions, banks, and brokerage houses will not start an account for a corporation without an EIN.
Since all corporations – including ones with no income – must file a federal income tax return, a corporation operating or incorporated in the United States normally must get an EIN anyway before or after being issued its charter.
Prior to 2001, the first two digits of an EIN (the EIN Prefix) signified the business was located in a particular geographic area. In 2001, EIN allocation was centralized at three of the IRS campuses, although all 10 campuses can assign an EIN, if essential.
EIN Application Video Example
Completing your Federal EIN Application online using one of the original online filing services.
2017 SS-4 Form Update
Compensation paid to Nonresident Alien workers are subject to particular graduated withholding tax rates. An alien is someone who is neither an U.S. citizen nor U.S. national. Moreover, this individual doesn’t hold a green card. As required by the law if you’ve got such workers in your company, you should withhold taxes on their settlements.
Federal EIN Application
Benefits of Having Your Federal EIN Application
Small businesses with an EIN enjoy a complete host of advantages unlike businesses without one.
Apply online today >>> Federal EIN Application
1. Company Construction Advantages
Although you are able to create your business without an EIN, doing so limits the kinds of companies you can run. For instance, you can’t form corporation or a partnership when your business lacks Employer Identification Number.
So that means you won’t love the benefits that come with these kinds of companies including pass-through tax, liability protection and more. Without an Federal Tax ID a a corporation and a partnership are out of question as much as business structure goes.
Complete your Federal Tax ID application online now to enjoy all the advantages that are available as it pertains to a legitimately recognized organizational framework for running business (company construction).
2. Liberty to Hire Employees
As a sole proprietor, your dream is to see your business grow into a big corporation with several branches from a sole proprietorship with just one worker across many employees and the nation or earth. Without an Employer Identification Number, it’s not possible for your dream. The law doesn’t let you to hire workers without an EIN from the IRS for reporting taxes and other records. Your state also requires this unique company identification number when reporting information to the state about your employees. Get your EIN online now with the aid of a professional.
3. Business Accounts
An essential benefit of obtaining an EIN or Federal Tax ID for your business is that this will allow you to set up a business account and apply for credit. Banks don’t allow business people to establish company accounts without this unique nine-digit number. Whole your EIN application with the aid of a consultant and get your Employer Identification Number by the next business day so you can begin to manage your company funds in a method that is more efficient.
4. Retirement Plan
As a self employed person, you want to consider creating your own retirement plan as early as possible. You need to ensure that you have enough money to provide the kind of retirement lifestyle you imagine by the time you retire. Only if you’ve developed an effective retirement plan to protect the assets you have toiled to acquire will your retirement be comfortable and pleasing.
Establishing a great retirement plan demands using your Employer Identification Number. Finish your EIN application online now and secure your retirement dreams.
5. Income Tax Withholdings
Compensation paid to Nonresident Alien workers are subject to particular graduated withholding rates. An alien is someone who is neither an U.S. citizen nor U.S. national. Moreover, this individual doesn’t hold a green card. As required by the law if you’ve got such workers in your company, you should withhold taxes on their settlements.
It’s possible for you to enjoy the advantage of having nonresident workers work for you but only if you’ve got an Employer Identification Number.
EIN or Employer Identification Number is a nine-digit number, like social security number, assigned by IRs to a business for the purpose of filing and reporting about federal tax. In order to identify taxpayers EIN number application is used by IRS.
This number is almost used by every type of business including partnership, LLC and corporations etc. It is normally not required for proprietorship business as they can use their social security number but still they apply for this identification number for various other purposes.
Who is eligible for an EIN number?
An EIN number application is necessary for a business if it:
Has some employees
Is operated as a partnership or corporate business
Holds taxes on the income except on the wages paid to non-resident foreigners
Is involved with the organisations listed with IRS
Other applications of EIN
Along with filing taxes EIN number application can also be used for
Applying for a credit card for your business
Opening a bank account for your business
Furnishing Form 1099 as independent contractor
Applies for permit for your business
When a sole proprietor should apply for EIN
EIN number application can be necessary for a sole proprietor if:
He has Solo or Keogh 401 retirement plan
He hires employees
He initiates a LLC or partnership business
He inherits or buys an existing business to operate it as a sole proprietor.
He is filing for bankruptcy
His bank requires it to open your business account
Other reasons to apply for EIN
There are certain other reasons which compel you to apply for EIN number even if it is not need as a sole proprietor.
Maintaining privacy: The use of social security number can expose the identity of a contractor working with large number of clients. If you provide personal services on contract basis then your client can withhold 28% of your payments, if you do not have an EIN.
Avoiding identity theft: The use of EIN number application, on the other hand, helps in reducing the risk of identity theft. It keeps your personal accounts safe from burglars. Your social security number can be used by the thieves and burglars to obtain tax returns and file tax returns fraudulently. EIN allows you to keep your social security number safe for long.
Establish the status of independent contractor: EIN number application can also be used for tax payments and returns to help in establishing your status as an independent contractor instead of an employee. It will increase your importance among your prospective clients.
For credit purposes: The EIN number application can help in proving the trustworthiness of the business dealing in financial matters where reputation counts. The use of EN is also effective for supporting personal financial dealings along with establishing credit for a separate business.
Maintenance of Credit: EIN makes it easy to establish the credit structure of a corporation or LLC business better than a proprietorship business as it can be used to influence credit report of the business.
Open business checking account: the business checking account opened by using EIN can help in differentiating personal accounts from business accounts.
Establish business credit file: EIN number application makes it easy for credit bureaus including Experian, Equifax and D&B, the Small Business Financial Exchange, to establish credit file of the business.
Obtain business credit card: After you have established credit in the market then you can use your EIN to apply for credit card for you business. You can try with small banks in your community to provide you business credit card if your business is new.
Apply for small loans: After establishing credit worthiness you can use your RIN to apply for smaller loans.
Obtaining EIN number
One can easily and quickly obtain EIN number free of cost just by applying directly on the website of IRS through its online EIN Assistant tool. You can also download the Application for Employer Identification Number as IRS Form SS-4 and send it by post, if you have any doubt in applying for it online. In fact, if you do not know how to fill up the form, then you should also download the form and fill it offline with the help of someone knowledgeable.
Thus, EIN number application is important for all types of businesses new or old, partnership or proprietorship, LLC or corporate as it helps IRS to identify its existence in the market.
EIN Application Online And How To Apply
The employer identification number (EIN) happens to be a unique number, which is issued by the internal revenue service (IRS). This distinctive number has been designed to facilitate for hassle-free and convenient tax administration by this government agency. Ideally, EIN plays a critical role in the reporting and the filing of tax statements.
It is a nine digit number that that the IRS issues, and it is used to determine the exact accounts of employers. As well as those business organizations which do not have any employees. As such, employers are required by the law to make use of EIN on all the documents they dispatch to the IRS and also the social security authority (SSA).
To make the process even easier for employers and business establishments, there is now the EIN application online that can be completed by visiting the official website of the IRS; irs.gov.
This website offers a simplistic and user-friendly computer program. Which has been specifically designed to offer a helping hand to those individual and business organizations that wish to obtain this critical number in a convenient and a markedly stress-free manner.
Who exactly is eligible to apply for EIN through the online application?
As would be expected not everybody is eligible to obtain EIN, despite of this service been provided totally free of charge. To begin with, this IRS number can only be issued to individuals or business organization whose business premises and offices are located within the US and its given territories.
Additionally, the principal officer, owner, trustor, grantor of business establishments which wish to obtain EIN must possess a valid taxpayer number and social security number.
These given guidelines are mandatory for any individual who wished to make use of the EIN application online, or for that matter any other process of accessing this service. At the same time, all applicants are restricted to making a single EIN application for every responsible individual per each day.
This particular guideline has been specifically put in place to ensure fair and equitable “treatment” of all taxpayers who apply for this service. And it has been in force since the month of May the year 2012.
How is the EIN application process executed?
Also, the process of applying for The EIN through the internet requires the user to fully complete the application form in just a single online session. Unlike most other applications of this nature, you cannot be able to save a half filled EIN application form and expect to return to complete it at a later period of time.
In the EIN application online a session soon expires if the user is, for one reason or the other, inactive for more than fifteen minutes. This certainly means that should you be inactive for more than this duration of time, you will be obliged to start the application process all over again, from scratch.
When can you use the EIN you have obtained online from the official IRS website?
Finally, it is very important to note that the EIN happens to be a permanent number in nature. Once you successfully obtain it via the internet, you can make use of it almost immediately in a wide variety of business transactions.
This includes opening a business bank account, applying for a business license and even when it comes to filing your tax returns through the mail.
Nevertheless, you should also take note of the critical fact that the EIN application online necessitate at least two weeks for the number to be integrated into your given IRS permanent records.
This definitely means that there are several vital transactions you cannot possibly make until this duration of time elapses. This includes been able to file electronic tax returns, executing any electronic payment for any product or service you may have obtained.
Lastly, you will not be able to be eligible for the IRS taxpayer identification number (TIN)’s matching program until this two week period has expired.
As you can evidently see, the EIN number is extremely critical for both employers and the business organizations they represent. This makes it all more necessary to settle for a means of obtaining this critical number in a stress-free and highly convenient manner. Which makes the EIN application online certainly a godsend for those individuals who may not have the time to utilize the telephone, fax or mail to apply for it.
Apply for an EIN Online Today
For now you can file online and obtain and official SS-4 from the IRS via mail and email with an online application, Click Here Now
Applying for an EIN application is something most people have to do at some point in their lives. When starting a new business an employer identification number is required for all employers and in many cases is referred to as an employee identification number although this is wrong.
Employees can, however, also acquire an EIN, or Federal Tax ID Number to protect themselves as well.
Beyond businesses EIN numbers are used for many other reasons such as, but not limited to, Trusts and Estates.
Many people file their EIN applications with their lawyers, its common practice, however this is VERY expensive and can even be time consuming.
We highly suggest trying an online SS4 EIN application specialist filing website like this one here.
When Acquiring an EIN number for a business you will first want to confirm that your business name is available and to file your articles of incorporation with your secretary of state prior to filing your federal documents such as your SS4.
Sometimes it is best to consult an attorney if you’re not familiar with the process of any of this or you can file everything online with most federal filing agencies, chances are if they process EIN’s they’ll process your LLC or other state files if you ask.