FAQs: Deciphering Federal Employer Identification Numbers
Do you need to understand federal employer identification numbers (FEINs) in the business landscape2 min read
Do you need to understand federal employer identification numbers (FEINs) in the business landscape? To reach top-tier compliance levels with the IRS, it helps to learn the ins and outs of FEINs. If you are based in Chicago, it is important to find an experienced attorney to help you understand local regulations and FEINs. UpCounsel is the perfect network to access the top-level business attorneys around.
What is a Federal Employer Identification Number (FEIN)? A Federal Employer Identification Number (FEIN) is a nine-digit code issued by the Internal Revenue Service (IRS) to identify a business entity. It is also known as a Federal Tax Identification Number or TIN. Small companies obtain a FEIN in the U.S; larger companies, with multiple owners, typically need a corporate FEIN issued by the IRS. FEIN helps you to manage identities of businesses.
Who needs a FEIN? FEIN is required for creating and sustaining your business's records. It is an integral part of filing taxes and maintaining proper financial and legal record-keeping in an organization. All business must obtain a FEIN even if you have sole proprietorship or limited liability company - it is used to identify the business entity and build its tax identity. Financial institutions may ask small business owners to provide a FEIN when seeking credit.
What documents are needed to get an FEIN? To get an FEIN, you need to provide your business's name, state you are legally incorporated or formed in, your business address and your type of business organization. It is essential that your account owner or responsible party presents a valid legal identification, such as a passport or driver's license. The responsible party should be prepared to sign Form SS-4, Application for Employer Identification Number, to receive a FEIN.
How can I get a FEIN? You can obtain a FEIN for an existing or new company online through the IRS website. You can also fill out and submit Form SS-4, Application for Employer Identification Number by mail, fax, or telephone.
What is the difference between a number and a letter in a FEIN? The two last characters of a FEIN are often the letters “-A”, unless an LLC has elected to be taxed as a corporation. In that case, the last two digits are "-01" or "-02", depending on the type of entity.
Should I keep my FEIN private? Yes, it is important to keep your FEIN private and secure. You should never post it online or provide it to anyone who does not have a legitimate need for it. If you are ever in doubt, contact a lawyer for legal counsel.
Securing a good understanding of federal employer identification numbers is crucial to managing the finances and identity of the business. With a robust legal team and solid legal counsel, you can ensure compliance and secure your financial interests. UpCounsel is the best network to find attorneys that understand local regulations in Chicago.
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