Getting Started on Applying for an EIN:A Guide for Businesses in Los Angeles
If you’re a business in Los Angeles, you may be aware of the importance of having an Employer Identification Number (EIN)3 min read
If you’re a business in Los Angeles, you may be aware of the importance of having an Employer Identification Number (EIN). An EIN is the tax identification number for a business entity, and understanding the process for obtaining an EIN is vital for corporate entities, non-profits, and LLCs operating locally. Read on to learn how to take the steps necessary to get started on the process of applying for an EIN and what an EIN can do for your business.
What is an EIN?
An Employer Identification Number (EIN) is a federal tax identification number issued by the Internal Revenue Service (IRS) to business entities to report their annual financial information to the IRS. An EIN is similar to a Social Security Number (SSN) for an individual, in that it is a unique number assigned to track finances related to taxes paid and income earned by the company.
In addition to using an EIN to report and pay taxes, businesses may also use their EIN when opening a business checking account, applying for business licenses, and filing the business’s annual financial reports. It is also used by many businesses and organizations to identify their entity during outside transactions.
Why is an EIN Important in Los Angeles?
An EIN is important for businesses, and specifically for businesses located in Los Angeles, due to the additional regulations and increased complexity of doing business in Los Angeles compared to other cities and states. The Los Angeles business environment has a unique set of ordinance, guidelines, and regulations, and operators and business owners must be aware of them to ensure legal compliance. Furthermore, businesses located in Los Angeles must provide their federal tax identification number to demonstrate their compliance with local regulations.
In addition to recognizing the necessity of an EIN in Los Angeles, it’s important to understand the long term impacts an EIN can have for businesses. An EIN allows businesses to file taxes, report taxes, and pay taxes to the federal and local government as well as to make tax-deductible investments in their business. Furthermore, businesses must use their EIN to receive business benefits such as insurance, business loans, and grants.
How to Get Started on the Process of Applying for an EIN
The process of obtaining an EIN may vary from state to state, but broadly speaking, obtaining an EIN begins by applying online or mailing in Form SS-4.
To apply online, You should start by visiting the Internal Revenue Service’s website and navigating to the “Apply for an Employer Identification Number (EIN)” link. Once there, you will be required to enter some basic information about yourself and your business, such as the type of entity, the location of the business, principal activity/industry, and the date the business began operating. After submitting this information, you will receive instructions for the next steps of the process.
If you prefer to mail in an application for an EIN, you should start by obtaining a copy of Form SS-4 from the IRS website. Once you have the form, you will need to fill out your information, providing your name, address, and the information referenced above. After completing the application, you must either fax or mail it to the IRS for processing.
What to Do After Receiving Your EIN
Once you receive your EIN, you should make sure to record it in a secure location. Furthermore, you should send a copy of your EIN to relevant financial institutions, such as banks and credit agencies. Once registered with these institutions, you will be able to file taxes and use the number for other purposes, such as opening a business bank account.
Finally, once registered, you will need to include your EIN on all documents related to taxes, invoices, letters, and other items. Failure to include the number on the appropriate documents may lead to delays in filing annual taxes or difficulty filing for other business benefits.
Getting the Right Local Help for Your Business
The process for obtaining an EIN varies from state to state, and the most important thing you can do is ensure that you have an experienced lawyer or consultant by your side. UpCounsel has an extensive network of experienced lawyers who are knowledgeable about the local regulations in Los Angeles and who can help you understand the process and ensure that your business is compliant. With UpCounsel, you can have access to high quality attorneys on demand to provide your business with the specialized support needed to file your taxes correctly and ensure your business is in compliance.