Understanding NY Business Tax ID Numbers
Beginning any business requires a little legal knowledge3 min read
Beginning any business requires a little legal knowledge. Among the many administrative tasks an aspiring business owner must understand is obtaining a federal ID number. All businesses in the United States must adhere to relevant federal regulations, and acquiring and using a federal identification number (or Employer Identification Number, or EIN) is essential for any organization. This article is aimed at any business owner in New York who is looking to gain a better understanding of federal ID numbers and how to obtain one.
The federal ID number – otherwise referred to as an EIN or tax ID number – is the primary form of organizational identification used by the Internal Revenue Service (IRS) for legal entities. In essence, the EIN is like a Social Security number for an organization, allowing the federal government to track business activity. An EIN may be issued for any entity including corporations, partnerships, estates, and non-profit organizations, among others.
Understanding the requirements for applying for a federal ID number is essential for any business operating in the United States. Every business must have a federal ID number to file federal returns and pay taxes. Federal ID numbers in New York are issued by the Internal Revenue Service, and the application process is relatively straightforward.
Fortunately, getting started on applying for a federal ID number for your business is a simple, three-step process.
The first step begins with obtaining the appropriate forms. The main form used for filing the application for a federal ID number is the IRS Form SS-4. All entities seeking to apply for a federal ID number must have and submit this form. The form can either be requested online or printed out (https://www.irs.gov/forms-pubs/about-form-ss-4).
The next step is to complete the form. This involves providing basic information about the business, such as its physical address, the nature of its activities, and its type. There are help lines available for any difficulty filing out the application. It is essential that all the information on the form is submitted accurately; any errors may result in critical delays in obtaining a federal ID number.
Once the form has been submitted, the last step is to submit the application and wait for the federal ID number to be approved by the Internal Revenue Service. Depending on the number of applications the IRS is receiving, as well as any mistakes submitted on the form, it may take several weeks for approval of the federal ID number.
It is also important to consider that in some states, including New York, businesses are required to apply for additional federal license if they are engaging in certain activities, i.e., if they deal with distribution, or with any type of industrial production. A federal ID number is still required, however, additional licenses may be necessary.
When it comes to filing local or state forms, like sales taxes or state employment taxes, a business may have to use the federal ID number to identify the entity. Businesses’ federal ID numbers should be shared with any partners or outside vendors involved in the business. Leasing or renting a property may also require submitting the federal ID number.
Working with experienced legal counsel is essential during any business formation process and is especially important when applying for a federal ID number. It’s especially important for business owners in New York to work with knowledgeable attorneys who understand local regulations and can provide informed advice.
At UpCounsel, we offer access to quality attorneys in the USA who best understand the different state-level regulations and requirements concerning how to get started on a federal ID number. Whether you need a one-time consult or an entire freelance legal department, our network of experienced lawyers has you covered. From small businesses to the Fortune 1000, groundbreaking companies of all sizes trust UpCounsel and its attorney community to provide high quality, cost-effective legal services. Our attorneys have an average of 14 years experience and our profiles of online attorneys include client ratings and reviews of recent work.