Applying for an Employer Identification Number (EIN) is an essential step for businesses and organizations in the United States. An EIN serves as a unique identifier for tax purposes and is necessary for various activities, such as hiring employees, opening bank accounts, and filing tax returns. This article will guide you through the EIN application process, explaining the requirements and procedures involved.
What is an EIN?
An Employer Identification Number (EIN) is a unique nine-digit tax identification number assigned by the Internal Revenue Service (IRS) to businesses, trusts, estates, nonprofits, and other entities operating in the United States. It is similar to a social security number but is used for tax-related purposes.
Why do you need an EIN?
Having an EIN is crucial for various reasons. Firstly, it enables the IRS to identify your business or organization for tax purposes. Secondly, an EIN is required when hiring employees or opening a business bank account. Lastly, it is necessary when filing tax returns, applying for licenses, or entering into certain business transactions.
Who can apply for an EIN?
Any entity engaged in business or having employees, including sole proprietors, partnerships, corporations, nonprofits, and trusts, can apply for an EIN. Individuals who don’t meet these criteria but need an EIN for other purposes, such as opening a bank account for an estate or trust, can also apply.
How to apply for an EIN?
You can apply for an EIN in two ways: online or by mail/fax. The online application process is quick and convenient, while the mail/fax option is suitable if you prefer a traditional application method or if you are not eligible for online application.
Online application process
Step 1: Determine eligibility
To be eligible for an online EIN application, your business or organization must have a principal place of business within the United States or its territories.
Step 2: Gather required information
Before starting the online application, gather the necessary information, including the legal name and structure of the entity, responsible party details, and the reason for applying for an EIN.
Step 3: Access the online application
Visit the official IRS website and navigate to the EIN application page. Look for the “Apply for an Employer Identification Number (EIN) Online” option and click on it to start the application process.
Step 4: Complete the application
Follow the prompts on the online application form and provide accurate information about your business or organization. This includes details such as the legal name, address, responsible party’s name and social security number, business structure, and the reason for applying for an EIN. Double-check the entered information for accuracy before submitting the application.
Mailing or faxing the application
If you prefer to apply for an EIN through traditional methods or are ineligible for online application, you can submit the application via mail or fax.
Step 1: Obtain Form SS-4
To apply by mail or fax, you need to obtain Form SS-4, which is the Application for Employer Identification Number. You can download the form from the IRS website or contact the IRS to request a copy.
Step 2: Fill out the form
Carefully complete Form SS-4, providing accurate and detailed information about your business or organization. Ensure that you include all the necessary details, including the entity’s legal name, address, business structure, and the reason for applying for an EIN.
Step 3: Submit the application
Once you have filled out Form SS-4, mail it or fax it to the appropriate IRS office. The instructions for mailing or faxing the form can be found on the IRS website or in the form’s accompanying guidelines. It’s essential to send the application to the correct address or fax number to ensure timely processing.
Applying for an EIN on behalf of another entity
In certain situations, you may need to apply for an EIN on behalf of another entity. This typically occurs when you are acting as a third-party designee, such as a tax professional or an attorney. When applying on behalf of another entity, you must have proper authorization and provide the required information about both the entity and yourself as the responsible party.
For more information, please visit ein-itin.com.