How to Get Started with a Federal Employer Identification Number
Getting started with a federal employer identification number, or 'EIN', can seem like a daunting task3 min read
Getting started with a federal employer identification number, or 'EIN', can seem like a daunting task. It is, in fact, the first step to establishing a business whether it's a sole proprietorship, partnership, LLC, corporation, or other legal entity. But with the right guidance and assistance, you can walk through the process with confidence. If you are in Los Angeles and looking for counsel that understands local regulations, then this article is for you.
An EIN is a unique nine-digit code used by the IRS to identify and label a business. It's like a Social Security number for a business, and enables the IRS to track companies for tax-related purposes. With it, your business can open bank accounts, make payroll, and hire employees. It is also a key requirement to file taxes, and businesses need an EIN if they’ll be hiring employees, either full-time or part-time, or working with contractors. So, it is an important and necessary identifier, which is why the IRS treats the process as serious business and, at times, makes it difficult to obtain an EIN.
Below are the main steps to obtaining an EIN:
1. Determine Your Business Type.
Your business type determines which IRS forms you'll need to fill out. This is a very important step because regardless of your business entity, different forms will need to be submitted with the application. Sole proprietors, partnerships, LLCs, and corporations, for example, will all need to fill out a different form.
2. Gather Your Documentation.
The information you'll need to include — and documents you'll need to submit — vary depending on your business type. The IRS may require certain documents to prove your identity as well as documents to verify your business' legitimacy and structure. Make sure you have everything you need to satisfy the IRS' requirements.
3. Compile the paperwork.
Organizing your paperwork is required. You'll likely need to make sure that you have photocopies of everything ready to be sent, as well as fill out the EIN lengthy application. By having the documents organized and ready to submit, you'll streamline the application process.
4. File the application online or on paper.
This is the main step you'll need to take. You'll need to fill out the paperwork and submit it to the IRS. Doing this incorrectly may cause delays and inconveniences, so make sure to do it correctly. You can file the application online or on paper, depending on the needs of your business and the time constraints you may be facing.
5. Get the EIN
Once the application is submitted, the IRS will generate an EIN for your business. An EIN is usually issued within two business days if you apply online, and four weeks if you submit the application by mail. Make sure you provide the correct information on the application, as mistakes can cause delays.
Taking these steps will get you your EIN in no time; but getting help from experienced tax professionals in the Los Angeles area is always recommended. An experienced tax professional knows exactly what you'll need to do to get your EIN quickly and efficiently and adhere to all of the regulations that apply to your business.
UpCounsel is an excellent resource that provides you with experienced tax advisors from the Los Angeles area. Whether you are looking for one-time consultations or long-term advice, our network of attorneys can assist you. All of our attorneys are experienced, highly rated, and come from renowned law schools and corporations. We strive to provide the highest quality legal services and offer cost-effective solutions to all of our clients regardless of the size of their business.
So, no matter what type of tax situation you are looking to address, UpCounsel's community of skilled attorneys can provide you with sound counsel. Take a look at our online profiles to read reviews from past clients and get a better understanding of our approach to tax services.