Application for Tax ID: Everything You Need to Know
The application for tax ID allows you to request an Employer Identification Number (EIN). This number is then used for filing taxes on earned business income.3 min read
2. Does a Single-Member LLC Need a Federal Tax ID?
3. What Do I Do if I Misplace my EIN Number?
4. How to Obtain an EIN from the IRS
5. How to Get a Business Tax ID Number
6. The Process of Getting a Business Tax ID Number
The application for tax ID allows you to request an Employer Identification Number (EIN). This number is then used for filing taxes on earned business income.
LLC Types and Taxes
An LLC is a business created by state statute. An LLC can include a corporation, partnership, or any other taxable partnership. An LLC means that the business does not file taxes separately from the individual. LLCs operate under the following rules:
- LLCs with multiple members can either be categorized as a corporation or partnership.
- An LLC with a sole member can choose their taxation as an individual or a corporation.
- An LLC with a sole member is known as a sole proprietorship or a disregarded entity.
- If a corporation owns a disregarded entity by a corporation, it is then considered a branch or division.
Does a Single-Member LLC Need a Federal Tax ID?
In most cases, a single member LLC does not need a Federal Tax ID. Instead, the single owner would report the tax filings on their individual tax statement. There are, however, exceptions to this statement. If a single owner has employees and pays wages, it is separate and a Federal Tax ID number should be used. Additionally, payroll often requires that the single member open a business bank account. You cannot open a bank account in the name of the business without a Federal Tax ID number.
What Do I Do if I Misplace my EIN Number?
If you have misplaced your EIN number, you can call the IRS number during normal business hours Monday-Friday. You will have to verify your information with the IRS. Once you have a confirmed identity they will provide you with your EIN number over the phone.
The many steps involved in opening a new business are complex and overwhelming. You can utilize the services of a legal document firm to file for your tax ID number.
How to Obtain an EIN from the IRS
There are a few convenient ways to obtain an EIN from the IRS. You will need to fill out the IRS Form SS-4 which includes your name and tax ID number. You can only obtain one EIN per day. You can then file for your EIN in the following ways:
- Online: This is the fastest method for obtaining an EIN. You can apply for an EIN at IRS.gov. Your business must have a United States-based location to utilize the online application form.
- Fax/Mail: You can also submit a paper form and mail or fax it to the IRS. The fax service is usable 24/7.
- Phone: You can also request an EIN by phone at (800) 829-4933 during normal business hours Monday-Friday. International applicants can also use this phone service by calling (267) 941-1099.
How to Get a Business Tax ID Number
If your business has paid employees, withholds taxes, or categorized under a corporation or partnership, you will need to file for an EIN. Your EIN is a special way to identify your business, similar to your social security number.
The Process of Getting a Business Tax ID Number
You will likely find the process of getting a business tax ID number very easy. Complete the following steps to get a business tax ID number:
- Decide if you need an EIN: Not every business requires an EIN. However, paying employees or withholding taxes does require that you have an EIN. An EIN number is also useful when dealing with trusts, non-profits, and estates.
- Apply for the EIN: You can apply for the EIN by phone, fax, mail, or online.
- Answer required questions: The application process will require that you answer five short questions. This process is best completed online.
- Identify a responsible party: You will have to provide a responsible party or contact person on the application. You will have to provide information about the responsible party. This person is liable for any questions from the IRS.
- Save the Documents: Filing online will generate an EIN immediately. It is necessary to save these documents so you have access to your EIN later on. However, if you do lose this number, you can easily call the IRS for it.
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