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Sunday, June 13, 2021

LLC Formations Presents The Best Ways To Apply For An EIN

Last updated Saturday, February 6, 2021 21:40 ET , Source: LLC Formations

How LLC Formations Makes Getting Your Tax ID Number Easy

Miami, FL, 02/06/2021 / SubmitMyPR /

Whether you are a startup or restructuring your business, your responsibility is to obtain an Employer Identification Number as a business owner.

It plays a crucial role in several ways, ranging from opening a bank account, filing tax returns, or applying for business licenses.

As soon as you start to establish a business, you need to apply for an EIN that ensures no delay in financing your business or getting a legal license.

If, as a new startup, you are unaware of what it is and do not know how to apply for an EIN, this post is for you. So, with that, let us get started.

IRS EIN Number Application - Federal EIN - Immediate Use

What is an EIN?
An EIN is an acronym for Employee Identification Number, also known as a Federal Tax Identification Number. It is a nine-digit number assigned to all types of businesses for tax purposes. In layman's terms, it is the social security number of a company.

When you start a new business, or your business grows, you need to visit the IRS website and check if your company requires an EIN. Some of its features are quite in line with the Individual Taxpayer Identification Number (TIN), as it helps you to keep a track of tax information and business contributions for tax purposes.

Types of Business that Need an EIN
Although an EIN is beneficial for all business entities, the Internal Revenue services are often required for streamlining the process of tax information regarding employees and other parties that a business may deal with in the process.

The EIN acts as the national identity of a business. Below are the types of companies that need the Employer Identification Number.

Partnerships or Corporations
Whether you are running a business in partnership or you own a corporation, you will have to apply for EIN. Even if your business does not have any employees, you still need this nine-digit number.

Limited Liability Companies (LLCs)
Any business that falls under the label of LLC needs an EIN. Be it a single-member LLC with employees, a multi-member LLC, or a single-member LLC liable for paying tax should be eligible for the EIN.

Sole Proprietorships
If you are a sole proprietor, you need to apply for an EIN if:

You are a Keogh plan holder
You already have employees or planning to hire over a year
You are required to file an Excise tax return, a federal Employment tax return, or Firearms, Tobacco, and alcohol tax returns.

Other types of businesses that require EIN are trusts, estates, non-profit organizations, plan administrators, and farmers cooperatives.

The Reasons You Need an EIN
As mentioned above, the IRS uses the Employer Identification Number to identify businesses for tax purposes. It is also required to establish accounts with vendors, apply for business licenses, and open business checking accounts. Some sole proprietors use an EIN to protect against identity theft or to show their status as an independent contractor. Other than these aspects, there are the reasons you need an EIN.

If you are an independent contractor or a freelancer, you see yourself giving Social Security numbers to clients regularly. So, instead, you may want to use an EIN.

Depending on your bank, you might require an EIN to open your business bank account.

The EIN also helps you to apply for a specific business permit.

Undoubtedly, using EIN rather than your Social Security number is beneficial for identifying theft. EIN provides an extra layer of protection to your business as you are not providing your Social Security number by any means.

How to Apply for EIN?
Applying for an EIN is straightforward and easy. It is entirely free when you use the IRS website. You can fill out the application Monday to Friday from 7 a.m to 10 p.m ET. You can apply for EIN online. However, make sure that your company is located within an US territory and you have a valid Taxpayer Identification Number to use on the online application. Once you are done with the application, it would be verified and then issued as soon as possible. Other ways you can apply for EIN could be via email, regular mail, fax, or over a phone line.

Before you apply for it, make sure all of your documents are ready. You can review your SS-4 application PDF form to ensure that you have all the vital information before you log into the website and start filling the form.

The quickest way to get an EIN is to apply online through LLC Formations. These types of professionals have the expertise, knowledge, and offer the best guidance to conduct this process as seamlessly as possible.

The Benefits of an EIN
Indeed, there are many benefits of an EIN for sole proprietors and individuals, such as:

It offers complete safety from an identity standpoint.
It can help companies get the required business permits and licenses.
It aids companies to establish credit, such as opening bank accounts and applying for business loans.

What if You Forgot or Lost Your EIN?
If you forgot or lost your EIN, there are a couple of ways to get it back. First, your old income tax returns must have your EIN on them. If you don’t have tax returns, you can see if a bank where you have opened your commercial account has it. You can turn to a state agency from where you got your license to provide it to you as well.

If you still do not have the right access to your information, you can call the IRS business and specialty line. Remember that they are usually open from 7 a.m. to 7 p.m. Monday to Friday.

Do You Ever Need to Change your EIN's?
The simple answer is ‘yes.’ Your business needs a new EIN in various situations. Some of the common scenarios when you need to apply for EIN are:

For Sole Proprietors
-Business incorporation situations
-Bankruptcy
-To function as a partnership and take in partners
-To Acquire existing businesses operated as a sole proprietorship

For Corporations
-The subsidiary starts using EIN of the parent company
-A New charter from the Secretary of State
-The business became a corporation's subsidiary
-To become a sole proprietorship or change to a partnership
-A New corporation forms after a statutory merger

Partnership
-Operated as a sole proprietorship and taken over by a partner
-Incorporation Events
-When one partnership finished and a new one starts

How to Make Changes To an EIN
Sometimes you have to make certain changes in your EIN due to various reasons. For example, if you change your business name, you need to tell the IRS, but you have to apply for a new EIN in some scenarios, too.

If you want to change the address associated with your EIN, you have to inform the IRS to update your EIN as soon as possible. To change your business location address or mailing address, you need to fill out the form 8822-B, change your business address and mail the form to the IRS.

Canceling Your EIN
To summarize, you can not cancel your EIN. Once an EIN is assigned to your business, it will never be assigned to some other business. With the IRS, you will never close your business.

If you need to do that by any chance, make sure to send a letter to the IRS that includes the EIN, your business registered address, the entity's legal name, and the reason you want to close your business account.

LLC Formations: Professional Assistance to Get your EIN without Any Hassle
If you want a professional file service to apply for an EIN on your behalf, you should hire professionals like LLC Formations rather than potentially incurring issues. Whether you have any concerns about your tax status, questions about EIN eligibility, or opening a business account, you can get in touch with LLC Formations.


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