Any business operating in the United States is required to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is used to identify a business for tax purposes. Businesses in Los Angeles must understand their responsibility and what is necessary to obtain an EIN in order to comply with local laws and federal regulations. Therefore, here are five things to consider when getting an EIN number in Los Angeles.

1. Determine Eligibility

The IRS requires any business operating in the United States to obtain an EIN. This applies to any business entity, including Sole Proprietorship, Limited Liability Company (LLC), Partnership, Corporation, and nonprofit. A valid EIN is necessary to file taxes and open bank accounts. Therefore, the first step in getting an EIN in Los Angeles is establishing business entity eligibility with the IRS and submitting the necessary paperwork.

2. Apply Online or via Mail

The next step is applying for the EIN. This can be completed online or by mail. An online application is the quickest method; the IRS typically processes an online application within one (1) business day. If the business prefers the mail processing option, it’ll take up to four (4) business days to process. Be mindful that additional time will be needed to process information after the mailing.

3. Understand Additional Required Documentation

For some business entities, additional documentation may be required to obtain an EIN. Corporations, LLCs, and Nonprofits may require additional information prior to the IRS granting an EIN. For example, a Corporation or LLC must provide a copy of the formation documents. Nonprofits must provide the formation documents as well as proof of tax-exempt determination. Make sure to have all required documents on hand when applying.

4. Understand Other Tax Responsibilities

Once the EIN is obtained, businesses must understand their responsibilities to local and federal tax codes. It’s important to know what kind of taxes must be paid and when they are due. Moreover, a business may need to register with certain government agencies like the California Department of Tax and Fee Administration (CDTFA), depending on the type of business.

5. Seek Professional Legal Advice

Businesses in Los Angeles may require assistance with understanding their responsibilities in regards to the EIN and other tax responsibilities. To ensure that a business is in compliance with all the rules and regulations, it's important to work with experienced attorneys. Sanctuary McGraw provides comprehensive legal counsel to businesses of all sizes in Los Angeles, ranging from entrepreneurial startups to large corporations.


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