What is an Employment Identification Number (EIN)?
An employer identification number is an IRS issued tax ID number used to identify a business. Nearly all businesses require an EIN, and these numbers can be received in a number of different ways. Applying online is the easiest method of receiving a number.
The application and process are free and numbers are provided instantly. This number is a federal identification number and does not qualify as a state number for those states that require such.
Here is an article about what an EIN is.
How Can I Get an EIN Immediately?
When you apply for an EIN you will be able to fill out the form and get your EIN immediately. The process must be done online in order for this to happen. If you choose not to apply online you will need to allow plenty of time to receive the number via the mail.
The process to get the EIN is quite simple and requires you to fill in basic information both in the paper form and in the online form.
Here is an article about how long it takes to get an EIN.
Can You Apply for EIN Online?
You are able to apply for an EIN online and will be able to get your EIN immediately if you choose to apply this way. For those who prefer to apply in other ways you can apply via fax or via mail.
If you apply via fax you will need to send form SS-4 to the service center. The process to have this application processed and replied to takes up to two weeks. At that time, you will receive a faxed response with your EIN.
If you apply via mail you will need to complete form SS-4 and mail it to the IRS. From there, it will take approximately four to five weeks to receive a response letter with your EIN.
For those who are international, there is the option to apply for an EIN via the phone. This must be done during approved business hours, which are Monday through Friday from 6 am to 11 pm EST. The individual will essentially fill out the form SS-4 over the phone with a representative.
Here is an article about different methods of applying for an EIN.
How Much Does Getting an EIN Number Cost?
The IRS wants you to have an EIN in order to keep track of your business and therefore does not charge for an EIN. This service is entirely free and can be done directly through the IRS.gov website.
Do not use services that charge you for an EIN or tell you that there are fees involved in order to get the number. The process to apply is easy and you can get through it without additional support, which means you can do it without needing to pay a service and certainly without paying the IRS.
Here is an article about the costs of an EIN.
Who Needs an EIN?
If you are not sure that you actually need an EIN the easiest way to know for sure is to check out the IRS page to answer a few questions. This page will ask you about:
- If you have employees
- If you operate as a corporation or partnership
- If you file employment, excise, or alcohol, tobacco, and firearms returns
- If you withhold taxes other than wages that are paid to a non-resident alien
- If you have a Keogh plan
- Or if you are involved in organizations such as trusts, estates, real estate mortgage investment conduits, non-profit organizations, farmers’ cooperatives, or plan administration
If you answer yes to any of these you will generally be required to have an EIN. For example, an LLC will need an EIN as it answers to several of these questions. If the answer to all of these is ‘no’ you are generally not required to have an EIN.
Anyone is able to apply for an EIN and you can be awarded a number even if you are not legally required to have one.
Here is an article about who needs an EIN.
EIN Application Form
Below are the requirements on getting an EIN number:
- Have employees
- Operate as a corporation or partnership
- File employment, excise, or alcohol, tobacco, and firearms returns
- Withhold taxes other than wages that are paid to a non-resident alien
- Have a Keogh plan
- Are involved in organizations such as trusts, estates, real estate mortgage investment conduits, non-profit organizations, farmers’ cooperatives, or plan administration
You will generally need to apply for an EIN. The application form is simple to fill out and intuitive. It is also located directly on the IRS website and costs nothing to fill out. This will allow you to register with the IRS and get a number that can then be used for tax purposes for your business.
If you do not meet any of the requirements above you may not need an EIN. You can consult a small business lawyer to find out more about whether you need one.
Here is a link to fill out the EIN application form.
Getting Started with an LLC
If you are looking at creating an LLC or how to get an LLC you want to start by creating the legal documentation. Working with a small business lawyer can help you with how to write an LLC, naming an LLC, and even articles of organization and an LLC operating agreement.
- Step 1: Naming an LLC. The first thing to do is decide on the name you want to use for your LLC. This must be good for branding and it must meet any legal requirements. It also needs to be different enough from other names that are currently in use.
- Step 2: Set a Registered Agent. Next, a registered agent must be named no matter what state the LLC is creaed in. This individual must be at least 18 and must reside or work within the designated state during normal business hours.
- Step 3: File an Article of Organization Form. You’ll need to get the forms that are specific to the state you are in as these vary slightly from one to the next. Fill out these forms in their entirety, fulfill any additional obligations, and file.
- Step 4: Form an Operating Agreement. The operating agreement is filled with the details about your LLC, including financial, legal, and management rights. It is not required by all states but does make the process of managing rights and responsibilities easier.
- Step 5: Create a Partnership Agreement. The partnership agreement could be part of the operating agreement and specifies rights and responsibilities of each of the parties within the LLC.
- Step 6: Get it Active. Once you create the LLC you will need to ensure it stays active within the state. There will be requirements for this as well.
By the time you know how to get an LLC through an attorney you will be ready and able to actually start working within your LLC and making profits. While setting up your LLC, make sure that you apply for an AIN as well. The earlier you do this the better it will be overall.
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