Applying for an EIN for Your Business: What to Consider
Applying for an Employer Identification Number from the IRS is the First Step for Starting a Business3 min read
If you’ve decided to start a business, one of the first steps you’ll need to take is applying for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is basically a Social Security number for businesses, but there’s a lot more to it than that. Before you apply, here are the top five things you should consider.
1. Who Needs an EIN?
Generally, any business entity, such as a Corporation, LLC, Partnership, or Sole Proprietorship, will need an EIN to open a business bank account and begin paying taxes. Businesses also might need an EIN to hire employees or apply for certain licenses or permits. Certain types of trusts, estates, government agencies, and nonprofits also require an EIN.
2. Do You Need a Professional to Establish Your Business?
In most cases, you do not need to hire a lawyer or accounting professional to establish a business. However, it’s important to research the rules and regulations for each type of entity and consider the benefits and drawbacks of each. Doing your own research is generally cheaper, but it’s important to weigh cost vs. the security of enlisting a professional.
3. Do You Need an Attorney to Apply for an EIN?
No, you don’t need a lawyer or other third-party to apply for an EIN. In most cases, business owners can register for an EIN online, via fax, or by mail. That being said, entrepreneurs who need one-time legal help or an ongoing freelance legal department can enlist UpCounsel’s nationwide network of experienced attorneys. UpCounsel’s attorneys have an average of 14 years of experience and provide high-quality, cost-effective services to businesses large and small.
4. What Other Information Do You Need to Provide?
When you apply for an EIN online, you’ll need to provide your name, Social Security number, address, and other details about the business, such as its type of trade or business, number of employees, and estimated date when you will begin filing taxes. You’ll also be required to answer several more detailed questions about the business, such as the number of labor hours expected in the next twelve months and whether you will have a foreign locations or employees. Be sure to do your research or consult with a lawyer to answer these questions accurately.
5. What Are the Specific Regulations for Businesses in New York?
When you apply for an EIN as a business in New York, you’ll need to be aware of the state’s particular regulations such as taxation laws and filing requirements. You also might need additional licenses or permits and need to comply with local ordinances and regulations depending on the location of your business. Consulting with UpCounsel’s attorneys can provide invaluable peace of mind with regards to complying with all of New York’s laws.
To summarize
Applying for an EIN is an important step in starting a business, but there are many essential steps to take and factors to consider along the way. Be sure to do your research, weigh the cost and benefits of enlisting a professional, and seek legal counsel when needed. UpCounsel’s community of experienced attorneys have experience and expertise to ensure you’re taking the right steps for the success of your business.
Topics:
