How To Get a Tax ID / EIN Number for a Sole Proprietorship

Are you a sole proprietor trying to determine whether or not you need a Tax ID (EIN) number? If so, you are not alone. Many sole proprietorships struggle with determining whether they should get employer identification number of their own. When you break it down, couldn’t you just use your Social Security Number in place of an Employer Identification Number? The short answer may be yes in the immediate sense, but it is not the smart course of action to take if you’re planning on running a serious business. Whether you own a church organization, hair salon or a restaurant business, you will want to understand the process of obtaining a Tax ID (EIN) number so you can carry it forward early in the life of your sole proprietorship.

Start your Tax ID (EIN) Application

Steps to Getting a Tax ID (EIN) for your Sole Proprietorship

  1. Gathering of Mandatory Information
  2. Using the Online Application Method
  3. Applying Through Mail, Fax, and even Telephone
  4. Steps to Obtaining the EIN
  5. Timing for Processing
  6. Needs for the EIN

1. Gathering of Mandatory Information

There exists mandatory information around sole proprietorships you will need to be sure you have in check before you go forward to obtain your employer identification number. The information will include details such as the name of the sole proprietorship, principal address of the business, the date the business came into formation, etc. You also need details on who is going to get the designation of the responsible party. With sole proprietorships, it is pretty easy to name the responsible party since it is usually just one person that is owning and running the business.

Still, even with sole proprietorships, you need details on the responsible party. The details are what you will have to include on the application you send into the Internal Revenue Service. The responsible party has to be a taxpayer to the Internal Revenue Service. He or she also has to have either a Social Security Number or Individual Taxpayer Identification Number. Some of the information on the responsible party will include:

  • The full legal name of the person
  • The date of birth of the individual
  • The principal address of the responsible party
  • Social Security Number or Individual Taxpayer Identification Number

After gathering up all of this mandatory information, it is then that you can move forward with one of the application methods for obtaining the employer identification number.

2. Using the Online EIN Application

You want to give strong consideration to the online application method for sole proprietorships. The online application method is fantastic due to the speed at which you can accomplish everything. Some of the big benefits of using the online application method include:

  • The ability to locate the most up to date form at any time. Since the form is available online, you know you are filling out the latest and greatest version.
  • The ability to fill out the form in just fifteen to twenty minutes in total.
  • Instant processing and reaction from the Internal Revenue Service. If there is any follow-up necessary, you will get that back from the Internal Revenue Service right away.
  • You can also get assistance from a Tax ID (EIN) service provider who can help you complete the necessary steps to obtain the identification number.

Start your Tax ID (EIN) Application

3. Applying Through Mail, Fax, and even Telephone

You have a few other options to obtain the employer identification number for a sole proprietorship. These other methods will include the ability to apply via mail, fax, or even through the telephone. There are considerations to have with all of these methods and each is worth a highlight.

  • The mail application method requires you to have access to the latest copy of the physical employer identification number application form. Once you fill it out, you can mail it to the Internal Revenue Service through the postal service for processing.
  • The fax application method is similar to the mail application method. You will be filling out the form in full and then using a fax machine to send it off to the Internal Revenue Service.
  • The telephone application method is unique in that you are calling the Internal Revenue Service to start the application method. Once you begin the process you will then submit supporting documentation to them to complete the process.

4. Steps to Obtaining the EIN

The steps to obtaining an employer identification number are pretty simple once you have it figured out as to how you are going to apply. The steps to obtaining the employer identification number include:

  • Obtaining all of the mandatory business information and gathering up everything necessary.
  • Completing the application method, whether you apply online, by mail, fax, or telephone.
  • Work with a Tax ID service provider to be sure the application is complete and accurate before sending in.
  • Wait for a response from the Internal Revenue Service.

5. Timing for Processing

The length of time you will be waiting for the employer identification number will depend largely on how you applied originally.

  • The online application method can allow you to obtain your employer identification number in as little as one hour or less.
  • The fax application method will usually require at least five business days for processing.
  • You can expect the mail application method to require four to six weeks in total.

6. Needs for the EIN

There are many reasons why you will need an employer identification number. These include tax filing purposes, opening up bank accounts in the name of the business, etc. You want to segregate your finances from your sole proprietorship and an EIN will allow you to do just that.

You have many options when it comes to obtaining sole proprietorship’s Tax ID (EIN) number. Some options will include you completing the application online, obtaining it through the mail application method, with a fax machine, etc. Using a Tax ID service provider can also streamline things, taking some of the steps off your plate so you can focus more on running the business. Get your employer identification number early as it helps sole proprietorships be sure they are in full compliance with the Internal Revenue Service from a tax administration perspective.