Getting an EIN Number in Chicago: An in-Depth Guide
Starting a Business in Chicago: A Guide3 min read
You’ve recently opened or are thinking of starting a business in Chicago, and now you’re just trying to get to grips with the ins and outs of the process. One of the most important steps in getting your business off the ground is getting an employer identification number, otherwise known as an EIN.
An EIN is a nine-digit identification number issued to employers and businesses by the IRS. It identifies the entity rather than a specific owner and is used for the purpose of filing federal taxes. It is also used to open a business bank account, apply for business licenses, and establish a business credit report.
Though the process of obtaining an EIN can be daunting, this guide will break down the steps into much more manageable chunks. It'll also provide you with invaluable insight into the regulations that govern the process in the Chicago area.
What is an EIN?
As mentioned before, an employer identification number, or EIN, is a nine-digit code assigned by the Internal Revenue Service (IRS) to businesses for taxation and banking purposes. It is used to identify employers and businesses while enabling the government to track financial information. It is distinct from a Social Security number (SSN) because it identifies the business itself rather than an individual.
A single business may have more than one EIN if it has multiple divisions or if it is owned by another company. Non-profit organizations can also receive an EIN.
Why Do I Need an EIN?
An EIN is used for a variety of banking and tax-related purposes. Specifically, it is needed in order to open a business bank account, apply for relevant business licenses, file taxes, and establish a business credit report. Without an EIN, it is difficult to do any of these things.
When is an EIN Needed?
An EIN is usually obtained when a business is first established. Generally, businesses that have employees, will need an EIN to file payroll taxes. However, businesses without employees, such as sole proprietorships, may not need one in order to file taxes.
Who Qualifies for an EIN?
The IRS will issue an EIN to any business that meets certain criteria. Businesses vary in their requirements, so there is not a fixed list of qualifications for all businesses. Generally speaking, any company with employees or performing business activities in the US may qualify for an EIN. This includes corporations, partnerships, non-profit organizations, trusts, LLCs, and many others.
What Documentation is Needed to Apply for an EIN?
The documents needed to apply for an EIN differ by type of business. Generally, the IRS will require documents such as the articles of incorporation or LLC operating agreement. It's important to make sure that all of the documentation is up-to-date and accurately reflects the current state of the business.
How to Get an EIN in Chicago
If you’re looking to get an EIN in Chicago, you'll need to adhere to the regulations set forth by the IRS. Depending on the type of business and the documentation you have, certain methods for obtaining a number may be more preferable than others.
Applying for an EIN in Chicago Online
The easiest and most efficient way of getting an EIN is applying online with the IRS. All you need to do is fill out a short form with information about your business and submit it. The IRS will then issue your number and mail you a confirmation letter.
Applying for an EIN by Mail or Fax
If you have all the necessary information about your business, you can always apply for an EIN by mail or fax. You'll need to fill out and send in a Form SS-4 along with any additional documentation to the IRS. The IRS will then process the form and issue your number.
Hiring a Local Professional to Obtain an EIN
If you're looking for an experienced local business lawyer to help you navigate the intricacies of the legal system in Chicago, UpCounsel can help. UpCounsel’s network of experienced attorneys has the expertise and knowledge to provide you with cost-effective legal services in the entire process of getting an EIN in Chicago. With UpCounsel, you can access professional counsel on demand and take advantage of client ratings and reviews of recent work.
Getting an EIN in Chicago can seem complicated and intimidating, but as we’ve seen, the process is actually quite straightforward and can be completed easily with the right resources. With the help of UpCounsel’s network of experienced attorneys, you’ll have the guidance and advice you need throughout the full process.