Frequently Asked Questions Regarding Obtaining an EIN in Chicago
Every business in Chicago needs an employer identification number (EIN) from the Internal Revenue Service (IRS)2 min read
Every business in Chicago needs an employer identification number (EIN) from the Internal Revenue Service (IRS). An EIN is a distinguishing nine-digit number allocated by the IRS, and organizations in Chicago must apply for it to have a separate tax identification number from the Social Security number of a proprietor. Every business structure needs a separate identification and tax number from the other businesses owned by the same proprietor. This article attempts to answer some frequently asked questions about obtaining an EIN in Chicago.
What is an EIN?
An EIN, or employer identification number, is a nine-digit number allocated by the Internal Revenue Service (IRS) to every company. It is a distinguishing number that serves as the business’s tax identification number. It is required of every business located in Chicago, including the businesses owned by a single proprietor. This number identifies the business as a separate legal entity from the owner of the business.
Who Needs an EIN in Chicago?
Any business that has employees within the City of Chicago requires an EIN. This includes corporations, partnerships, limited liability companies, tax-exempt organizations, sole proprietors, nonprofits, and other types of entities.
What Happens if You Don't Get an EIN?
If an entity in Chicago fails to get an EIN, it can face hefty penalties from the IRS. The entity can also find itself prevented from filing taxes, obtaining loans, and many other activities.
How Can You Get an EIN in Chicago?
The process of obtaining an EIN in Chicago is straightforward. Start by submitting an SS-4 Application, which is an application for employer identification number. This form can be obtained online, and the instructions are provided on the IRS website. After submitting the form, the IRS will process it and issue the EIN. Additionally, business owners can opt to use the services of business attorneys in Chicago to handle the paperwork for them, providing added convenience and expert advice along the way.
How Much Does it Cost to Get an EIN in Chicago?
Getting an EIN is free of charge. You are not required to pay for any application or issuance fee.
Are There Any Exceptions to Obtaining an EIN?
Yes, there are some exceptions to obtaining an EIN in Chicago. A sole proprietorship without any employees does not need to apply for an EIN. A single-member LLC (limited liability company) that does not have employees and does not file tax forms other than a Schedule C with the 1040 tax return does not need to apply for an EIN. In some cases, a married couple can use a single EIN if they file their taxes jointly.