Obtaining a federal employer identification number (EIN) for your business is a significant step in the creation and growth of your small business. With an EIN from the Internal Revenue Service (IRS), you’re able to file taxes, open a business bank account, and access other opportunities that come with being a legitimate business. In Chicago, there are unique regulations and considerations for obtaining an EIN that you should be aware of before beginning the process.

Understanding the requirements of obtaining an EIN in Chicago can help streamline the process and make sure you’re meeting all of the necessary processes. Whether you’re a sole proprietor, corporation, or partnership, the following five considerations should be top of mind before you request your EIN.

Top 5 Things to Consider When Obtaining Your Federal Employer Identification Number

1. Find Out What Kind of Business You Have

The type of business structure you decide to establish for your company plays a key role in the process of obtaining an EIN. Sole proprietorships, partnerships, and corporations all have to submit an EIN, but there are different forms you’ll need depending on the nature of your business.

Understanding how your business is legally formed, whether you set up an LLC with the Secretary of State or opted to be a sole proprietor, will inform the IRS forms you need to fill out and the type of documentation you’ll need.

2. Research Chicago-Specific Tax Requirements

Chicago has a variety of tax laws and regulations that you should understand in order to efficiently and effectively apply for an EIN. Unfortunately, the state does not make every bureau and agency responsible for the dissemination of this type of information easily accessible and you may be left to do your own research.

Before you submit an application, make sure you know what licenses and permits you need, the steps for properly filing taxes, and any other unique requirements.

3. Understand the Guidelines for Applying for an EIN

Once you’re familiar with the tax laws that apply to your specific business, the IRS recommends that you fully understand the process for applying for an EIN. Knowing who is responsible for a requesting an EIN, when an EIN is required, and the process for filing the form are all important elements to the application process.

Your EIN will be unique to your business, so it makes sense to double-check the IRS’s guidelines before submitting your application.

4. Confirm Your Eligibility

Eligibility for an EIN efforts with establishing an individual social security number and the person applying for the EIN must have valid identity documents from the US or a US territory. This is to ensure that the applicant is a legal citizen of the US and is not attempting financial fraud by using a false identity.

You’ll also need to know the estimated total annual payroll of your business and the number of employees you plan to hire. All of this is essential to the application in order to ensure that you are meeting the requirements for EIN application.

5. Get the Right Legal Support

Rambling through legal policies and regulations might feel friendly and often overwhelming, but having a lawyer that specializes in helping business owners and entrepreneurs obtain their EIN can make the entire process easier and help you avoid disagreements with the IRS.

Doing your research to find the right firm or lawyer with experience in helping businesses in the Chicago area is worth the initial investment of time and money. You can also use online resources and consulting services to make sure you’re up to date on all the current EIN requirements in Chicago.

In summary

Your EIN is an important tool for managing a responsible business, and making sure you abide by all the necessary laws and regulations can help you avoid any legal troubles with the IRS. Taking the time to properly research and understand your business’s requirements for obtaining an EIN in Chicago can greatly benefit you in the long run and help you make the most of your business.

Topics:

Federal employer identification number,

Chicago legal regulations,

Business applicants