One common question that many owners of a business ask is whether they need an employer identification number or EIN. If you need an EIN, you need to know the quickest and easiest way to obtain a unique tax identifier. There are criteria that went into effect in 2012 by the Internal Revenue Service that dictates the EIN requirement.
You will need an EIN as a corporation or partnership (almost always) if you have employees, withhold taxes on income, have a Keogh plan, or file a variety of tax return types. For the most part, all companies will need an EIN. The only exception is usually if you are a sole proprietor, in which case you can usually rely on your Social Security Number in its place. If you determine you need an EIN, you want to figure out how to apply for an EIN online.
Steps to Applying for an EIN Online>
- Prepare Business Owner Information
- Apply for an EIN Number Online
- Apply for an EIN Number by Phone, Mail or Fax
- Why Do I Need to Obtain an IRS EIN Number?
- How Do I Get an EIN Number?
- What is the Difference Between an EIN Number and a FEIN?
The first step in applying for an IRS EIN is to get your business owner information together. You need to have a firm agreement on the principal location of the business, which industry your business resides in, as well as naming a responsible party. The responsible party is the individual that will control, manage, as well as direct the disposition of any assets and funds of the organization.
You need to have the agreement of your company on who the responsible party will be as well as what other business owner information exists. Figure out and nail this information before you go through the IRS EIN Application process.
Applying for an EIN number online is the easiest method to get the unique IRS identifier. The Internal Revenue Service takes the form and puts it all available online for easy entry and submission. You simply take a few minutes to complete the form in one sitting and submit it.
The great thing about the online application process is you get an immediate result. The Internal Revenue Service does an instant validation of the information you submit. They will look at the responsible party, verify the identifier of the individual, and then complete the process. Once they finish, they will return the number to you in a matter of minutes. With the online application process for the EIN, you can have a number in less than fifteen minutes in total.
You have the ability to apply for an EIN number in more ways than just going with the online application process. The other methods are the phone, mail, or fax process.
If you are going to apply by fax, you need to get the appropriate form from the Internal Revenue Service. With the form in hand, you have to complete it in full, with responsible party information and all. Once you have the form in a complete state, it is then you submit it to the Internal Revenue Service via fax. After a few days of them doing the validation of information, they will fire back to you the EIN number.
The mail method is similar in that you are doing a manual filling of the form requirement with the Internal Revenue Service. When the form is ready to go you are putting it into the mail. The turnaround time for the mail method of obtaining the EIN is the longest, as it may take a few weeks to get the number back.
The phone method is quick but does require you to verbally get onto the telephone with the Internal Revenue Service. Once you are able to get an agent on the line, they will walk you through the application process by asking a series of questions. When you answer everything the end result will be validation and delivery to you of the employer identification number.
It is important to get an IRS EIN number to be in good standing with the Internal Revenue Service. The IRS requires a company to have an EIN or FEIN so that they can identify your business and be able to tie it back to revenue and such.
If you are a corporation, a partnership, or any other type of business, the EIN is a number that you have a legal requirement to obtain. Once you get going with the business, the number will be a need if you go to open up a bank account, apply or a business credit card, etc.
You can get an EIN number following any of the steps we laid out. You can apply online, through the phone, mail, or via fax. You work with the IRS to get the identifier.
It may be the first time you are getting going with a business. It can be easy to think there are major differences between an Employer Identification Number and a Federal Employer Identification Number. The abbreviations of EIN and FEIN are what you commonly see in the business world. You do not need any confusion though as the FEIN and EIN are exactly the same. The two terms can exchange with one another freely.
Both the FEIN and EIN are the same nine-digit number that you get from the Internal Revenue Service. The tax reporting needs the Internal Revenue Service dictates come from that same number.
The online application process for an EIN is easier than you think. Once you understand the flow, figure out how to get through the online application, you can complete it in a matter of minutes. The Internal Revenue Service put the online application process into place so you can get your identifier fast. Once they validate your information, you could have the federal employer identification number in hand near immediately.