How to Get a Tax ID Number
For businesses, be they corporations, limited liability corporations, or partnerships, a federal taxpayer identification number or "TIN" for short, is an essential element of getting that business up and running.
For businesses, the federal taxpayer identification number is also known as an "employer identification number" or "EIN." The EIN is used to identify business for various purposes. Unlike a social security number, which is in the form of XXX-XX-XXXX, the EIN is in the form of XX-XXXXXXX.
Businesses must have an EIN in order to open bank accounts, pay the various withholding and employment taxes that they are obligated to pay, and file tax returns. (Depending upon the particular state, a business may also have a state tax identification number.)
How to get a federal tax ID number? The process is very simple and straightforward. It can be done by mail, phone, fax, or online, by filing a form, the SS-4, with the IRS.
First, make sure your business has been set up in accordance with the particular state law in which the business is principally located.
Second, go to the IRS website, which has a section devoted to businesses. The website is www.irs.gov/businesses. Click on the heading "Starting a business" on the left hand side. There is a topic "How to apply for an EIN."
Third, fill out the required form, which is an SS-4. Page 2 of the form asks the question "Do I need an EIN?" Read the questions and answers to make sure that you are properly applying for an EIN.
Fourth, review the SS-4 carefully before completing it. Make sure you have all the information needed to complete the form correctly. For example, make sure you know what business entity you have: is it a corporation or a limited liability company? The state of incorporation must be provided, along with the type of business the entity is in, and the date the business started.
You'll also need to inform the IRS as to the closing date of the business's accounting year. The closing date can either be December 31st, which is a calendar year closing, or the end of another month, which is usually chosen after consultation with the business's CPA, which is a fiscal year end closing.
Fifth, make sure that the form is filled out correctly. Once the form is completed, then submit it to the IRS.
If any returns or other documents requiring the EIN need to be filed before the IRS sends the EIN, then indicate in the place where the EIN is to be provided that the EIN has been applied for and the date of the application.
How to get a tax ID is not difficult. Read the form carefully, fill it out completely, and submit it to the IRS. However, if the form is not filled out correctly, there will be a delay in getting the EIN and thus a delay in opening bank accounts and getting the business going.
