What You Should Know Before Getting a Tax ID Number
Navigating the world of taxes and dealing with the IRS can be a difficult, but necessary, challenge3 min read
Navigating the world of taxes and dealing with the IRS can be a difficult, but necessary, challenge. That’s why having a good understanding about obtaining a Tax ID Number (TIN) is important. A Tax ID Number, also known as an employer identification number (EIN), is a unique nine-digit number assigned to business entities engaged in tax-related activities in the United States. If you’re considering applying for a Tax ID Number as a business in New York, here are the top 5 things to consider:
1. Who Should Apply for A Tax ID Number
Before taking any steps to determine your Tax ID Number, determine if your business should even apply for one. Generally speaking, those who inherently should get a Tax ID Number include anyone who pays employees, files employment, excise, or alcohol, tobacco, and firearms taxes, operates a business as a corporation or partnership, and/or is a trust, estate, nonprofit, or church.
2. Where to Apply
When it’s time to apply for the Tax ID Number, it’s important to find the right place to do so. Generally, it’s recommended to apply directly to the IRS. That option is available to those who are located within the US and who have Social Security Numbers (SSN); however, those located outside of the US or without a SSN will need to fill out Form SS-4 (Application for an Employer Identification Number) and mail it to the IRS Center in Covington, Kentucky, or fax it to 859-669-5760.
3. Understand the Process
It’s important to take the time to look into the EIN application process to make sure you’re comfortable with it and have a good understanding of it. When applying online, make sure to select the right type of entity that applies to your business, double check the name and address of the entity for accuracy, include detailed information on the entity’s responsible party, and, if applicable, submit a Form SS-4.
Those who take the route of mailing or faxing their applications can look at what the Form SS-4 will require them to submit. This includes the name, address, and employer identification number (if the entity has one) of the entity that is requesting the Tax ID Number. In addition, information of the responsible party needs to be included, such as name, title, mailing address, ownership, and date the entity began transacting business.
4. Consider Seeking Professional Help
Though applying for a Tax ID Number might seem easy enough, there are still regulations and other details that you should know before submitting your application. Especially if you’re a growing business, partnering with a legal professional to navigate tax and IRS matters can prove especially helpful. If you’re located in New York, many companies, such as UpCounsel, offer top-notch legal services from experienced business attorneys.
5. Time for Submission and Getting Approval
Those who apply online should be aware of the faster turnaround time for approvals. Generally, those who submit their applications over the Internet won’t have to wait more than a few hours for their Tax ID Numbers to be issued. On the other hand, if applicants opt for mailing their application, processing times can take up to four weeks or longer.
If you’re applying for a Tax ID Number as a business in New York, it’s important to understand the process and to consider seeking professional help if needed. Before submitting your application, make sure you take the time to know if and where you should apply for the number, and consider the timeline for processing.
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