Business owners in the New York City area must stay up-to-date on municipal, state, and federal regulations if they want to be successful. One crucial component of federal tax compliance for a business is the Employer Identification Number (EIN), also known as a Federal Tax Identification Number, or FTIN. This article provides an overview of the types of business that need an EIN and the process for obtaining one.

What is a Federal Tax Identification Number?

The Internal Revenue Service (IRS) assigns a unique EIN for every business that needs to file a tax return. An EIN is a numerical identifier, similar to a Social Security number, that the IRS uses to keep track of an individual’s or a business’s taxes. In addition to serving as a tracking number, an EIN can also be used to open a business banking account and to apply for certain business licenses.

Who Needs a Federal Tax ID?

In general, all businesses in the US are required to obtain an EIN from the IRS and include it on their tax return. This includes corporations, Limited Liability Companies (LLCs), partnerships, trusts, and certain non-profit entities. There are also a few specific activities that require an EIN, even if the business doesn’t need to file a tax return. These activities include:

    Employing individuals

    Making alcoholic beverages

    Engaging in farming activities

    Making gambling winnings taxable

How to Obtain a Federal Tax ID

An EIN can be obtained from the IRS in three different ways:

    On-line: The quickest and easiest way to obtain an EIN is to visit the IRS official website and complete an application there. Before beginning the application, make sure you have all of the necessary information, such as your business address and the name of your business’s responsible party.

    By fax: Fax your completed application for an EIN to the IRS at 855-632-5227. Make sure to include your signed authorization letter and your bank account information.

    By mail: Fill out the appropriate EIN application form and send it to the IRS at the applicable address listed on the form. Make sure to include your signed authorization letter and your bank account information.

Last ideas

Understanding the federal tax regulations in the New York City area is essential for any business owner. This article provides an overview of the EIN requirements and how to obtain an EIN. However, depending on the specific situation, it may be best to consult with a lawyer for more detailed advice. For further assistance, visit UpCounsel’s network of experienced lawyers, who have the expertise to provide high-quality and cost-effective services.


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