A partnership is a type of business organization, like all others, that needs an employer identification number. Obtaining this unique identifier is something you want to prioritize, to be sure that the partnership is in full compliance with the Internal Revenue Service from day one of the operation. A partnership is seen in the eyes of the Internal Revenue Service the same way a traditional LLC is from the standpoint of federal tax identification number requirements. Understanding the process to go through the application, how to execute the form and obtain the number, is important.
Steps to Get a Tax ID for your Partnership
- Mandatory Partnership Information
- Applying Online as a Partnership
- Applying via Mail, Fax, or Phone
- Timing of the Application Processing
- Needs for the Tax ID (EIN)
Some of the mandatory information you need as a partnership is going to include details on the partnership itself, as well as the individual that will be responsible for the partnership and the dealings with the Internal Revenue Service.
In terms of information about the partnershipitself, this will be a lot of basic details. You are going to have detail out the name and legal address of the partnership. The date that the partnership was formed is also something you want to have documented and ready to go with the application.
It is tricky in a partnership in that there are usually two individuals that want to represent the partnership to the Internal Revenue Service together. You cannot do that though as the EIN application has to name just one responsible party. The responsible party is the partner that will sign on behalf of the partnership to the IRS.
The individual naming him or herself as the responsible party has to provide information on his legal name and date of birth, address, as well as Social Security Number or Individual Taxpayer Identification Number.
The online application process for a partnership is where you can gain a lot of efficiencies. It is a speedy process and one that you can do completely electronically. Benefits include:
- The ability to complete the online application in just a few minutes and submit immediately to the Internal Revenue Service for processing.
- An instant reaction from the IRS as to whether or not they accept the application
- Assistance from a Tax ID service professional to complete the application.
When you compare it to all application options available, online is the easiest path by far for a partnership to obtain a federal tax identification number.
There are three other methods in which you can go about applying for a partnership Tax ID (EIN) number. These methods include applying via mail, a fax machine, or even over the telephone. In all of these cases, you will need to know the mandatory business requirements. Assistance from a Tax ID service professional is also something you will want to consider.
The telephone method is the most unique application method in that you start by talking to the Internal Revenue Service. You cannot complete the whole application process online, as you will have to submit some documentation to them via mail or fax, but it does get the application going.
The mail application method is quite common in that you are going to be obtaining and completing the most up to date and a physical copy of the application form for an employer identification number. You will then package it up in an envelope with any necessary supporting documentation and send it to the IRS for processing.
The fax application method exists as well and is similar to the mail application method. The biggest difference here is that you are just faxing the application to the IRS rather than mailing it.
The length of time it will take to process a Tax ID (EIN) application for a partnership is going to vary greatly based on how you submit the form in the first place.
When you apply via the online application method, what you can expect is for the full application to take around 60-minutes in total. When you hit the submit button, it goes to the Internal Revenue Service for immediate processing. If there is an error, they will alert you so you can quickly correct.
Applying via a fax machine is going to take a bit more time. When you apply via fax, expect it to take around five to seven business days in total. The full application process requires the fax to get to the IRS, allowing it for processing, then have the fax come back to you.
The mail application method will take the longest time. With this method, you can expect it to take four to six weeks in total before you have your federal tax identification number or Tax ID (EIN) number.
There are a variety of reasons as to why a partnership is going to require a Tax ID (EIN) number. The first big reason is for tax filing purposes. To file a partnership tax return, you need to have the EIN in-hand. If you want the partnership to do a variety of business transactions, such as hiring employees or even opening up a bank account in the name of the partnership, you will also need to have an EIN.
The federal tax identification number is something you want to be sure you get early on in the existence of the partnership. Do your homework and understand the application process. Have a good understanding of what it means if you apply online, via a fax machine, or through the mail. You also want to have a good grasp of the benefits of a Tax ID service provider. Obtaining a Tax ID (EIN) for a partnership and following the online Tax ID application process can reap big benefits. Take your time to apply early and you will be set for easier reporting and business operation down the line.