How to Get Started with Your Federal ID Number in Chicago
Starting a business in Chicago can be an exciting venture, but it can also involve a lot of legal paperwork3 min read
Starting a business in Chicago can be an exciting venture, but it can also involve a lot of legal paperwork. One of the most important things you must do to get your business up and running is to obtain a federal employer identification number (EIN). This number serves as the business’s tax ID and may also be requested by vendors and business partners. In this article, we will discuss how to get started with your federal ID number in Chicago.
What Is a Federal Employer Identification Number?
A federal employer identification number (EIN) is a nine-digit number issued by the Internal Revenue Service (IRS). It is used to identify a business for federal tax reporting purposes. For businesses with multiple owners or multiple locations, each business will need its own EIN. Businesses without employees do not need to obtain an EIN, but may still choose to do so in order to open a business bank account or initiate an LLC.
Who Needs an EIN?
If you plan on filling out payroll taxes, setting up an LLC, or applying for loans, an EIN is necessary. It is also required for any legally established business with multiple owners or employees. Individual companies without employees may not be required to obtain an EIN, but it may still be beneficial to do so in order to open a business bank account or gain access to investor funds.
How to Get an EIN
The easiest way to obtain an EIN is to submit an online application to the IRS. The application is fairly straightforward and requires only basic information such as name, address, and type of business organization. It’s important to note that the applicant must be the business’s “responsible party” and must have a valid social security number or other designated taxpayer identification number.
If you’re based in Chicago, you can also visit a local IRS office to obtain an EIN. It is recommended that you call ahead and schedule an appointment with an IRS representative. You will need to bring necessary documents such as the business charter, a copy of the Articles of Incorporation, and a valid social security or taxpayer ID number.
How to Use an EIN
Once you have obtained an EIN, you must use it to identify your business for federal income tax purposes. This means that your business will need to file a Form 941 to report any wages you have paid to your employees during the year. You should also use your EIN when opening a business bank account or entering into any business contracts.
When to Hire an Attorney
If you’re starting a business in Chicago, you may want to consider hiring an attorney to help you with the process of obtaining an EIN. An experienced business lawyer can ensure that your application is filled out correctly and can explain any Texas state laws which may affect your business. Additionally, a lawyer can review any contracts you enter into and help you navigate any legal issues which may arise during the course of doing business.
Conclusion
Obtaining an EIN is a critical part of establishing a business in Chicago. It is used to identify a business for federal tax purposes and may be necessary for certain contracts or business transactions. Fortunately, it is relatively easy to obtain an EIN, either by applying online or visiting a local IRS office. It is also wise to consult a lawyer if you have any questions about the process or Texas state law.
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