Common Mistakes To Avoid When Applying For An EIN

An Employer Identification Number (EIN) is an IRS-assigned number to recognize a business entity that operates in the United States. An EIN is used for any business tax returns or legal purposes.

You may apply for an EIN by fax, mail, telephone (International applicants), or the fastest way – applying online. To apply, fill out Form SS-4, Application for Employer Identification Number. In some cases, when a certain requirement is not met, your EIN application may be rejected or you may receive an IRS reference number that indicates an error.

Here are some common mistakes to avoid when applying for an EIN.

Incomplete Or Inaccurate Information

To avoid any delays in obtaining your Employer Identification Number (EIN), be certain to prepare and submit all the required information. This information includes:

●       The legal business name

●       Your legal name

●       Business address, street address, country, and state

●       Name and Social Security Number (SSN) or TIN of the responsible party

●       Type of business structure

●       The number of members (if applying as an LLC)

●       Key business dates

●       Primary activities of the business

●       Previous application (if applicable)

Incomplete or inaccurate information about your business or its responsible party could result in a rejected application as it does not tally with the information the IRS may already have.

Multiple Applications

Applying for an EIN is an easy process, but how many EINs can someone obtain?

If you run a single business with different divisions, only one EIN is needed for the whole business entity. However, if you have multiple business entities, each of them should be treated as unique. This means one EIN per entity, as it is not possible to use the same EIN for all your business entities even though the responsible party or applicant is the same. 

Here are some best practices for obtaining more than one EIN:

●       Submit a separate SS-4 form for each additional EIN.

●       None of the forms can be dated or filed on the same day as the IRS only allows a single taxpayer to apply for one EIN daily.

●       Don’t submit multiple forms for the same business entity as repeated entries may be regarded as errors in the system.

Improper Selection Of Business Entity Type

When filling up Form SS-4, make sure to indicate the correct legal structure for your business, as each business entity is taxed differently. Those include:

●       C-Corporations

●       S Corporations

●       General Partnerships

●       Limited Partnerships

●       Multi-Member LLCs

●       LLCs Taxes as Corporations

●       Single Member LLCs with Employees

●       Sole Proprietorships with Employees

Before submitting Form SS-4, review that you have selected the correct business entity type.

Note: Single-member LLCs and sole proprietorships without employees do not need an EIN. Only an SSN is required for these business entities.

Missing A Responsible Party

All EIN applications must disclose the names and Taxpayer Identification Numbers (SSN, ITIN, or EIN) of the responsible parties as they control, manage, and direct the entity for the distribution of its assets and funds.

It is important not to exclude the details of any responsible party during the EIN application. A correct SS-4 Form should include the name, Taxpayer Identification Number, and signature of the responsible party.

If there are any changes to the responsible party for your LLC, you will need to fill up Form 8822-B (Change of Address or Responsible Party —Business) and mail it to the IRS as soon as possible.

Missing Appropriate Forms

An EIN application is easy to understand and quick to complete as there are no extra forms needed besides Form SS-4 submitted to the IRS.

You must provide the latest up-to-date information in your Form SS-4. However, if you are making changes to the business’ responsible party, address, or location, then Form 8822-B must be submitted and reported to the IRS. Include all the details of your personal and business information as they support your application process.

Applying Before Incurring Tax Liabilities

If your business is an LLC, and you wonder if you can obtain an EIN before your LLC is formed – the answer is to wait. You should ensure the name of your business is properly registered and not rejected, and when applying for an EIN, the IRS will request the approved legal name that was approved and the date the business was formed.

Most business owners form or register their LLCs with the state before obtaining an EIN.  If you apply for an EIN without registering your company with your state first, you will most likely get your EIN application rejected. We recommend waiting until your LLC is formed before applying for an EIN.

What Happens If I Make A Mistake On My Application?

Made a mistake in applying for your EIN? Here’s a guide to help you when you receive a rejection notice from the IRS:

  1. Contact the IRS, rectify the information on your Form SS-4, and send a letter to the IRS to make these changes. Be sure to complete the process by including all necessary business information in your letter along with the correct changes made.
  1. The waiting time for this process may take up to 30 days to update your current information in the government database.
  1. If this is your first time applying for an EIN and it gets rejected, you may need to review your records, make changes, and submit your application again.

Where Do I Apply For An EIN?

If you are looking to expand your business opportunities and wish to obtain an EIN, let us assist you. Apply for your EIN today.

Next Page »

The Benefits Of Having A Federal Tax ID Number For Your Business Finances

The Benefits Of Having A Federal Tax ID Number For Your Business Finances

An Employer Identification Number (EIN) is a unique nine-digit tax identification number given by the IRS to businesses, organizations, and other entities for filing taxes and reporting purposes. This EIN works as a federal tax identification number which you will need to pay federal taxes, hire employees, create a business bank account, and apply for business licenses and permits.

When Is An EIN Required?

An EIN comes in handy when you are hiring employees, operating as a partnership/corporation, filing tax returns, or withholding taxes from income other than wages. Bear in mind that all business owners of all types of business entities (except sole proprietorships) must apply for an EIN.

Obtaining an EIN is the first crucial step for business owners as it provides an advantage for your business operations and financial management. If your business is one of the following legal structures, you should consider applying for an EIN:

●       Limited liabilities companies (LLCs)

●       Non-profit organizations (NPOs)

●       S Corporations

●       Partnerships

●       Estates

●       Trusts

The IRS does not consider the size of a company when issuing EINs, so even if you only have one employee, you are still eligible to apply for an EIN. Sole proprietors need not apply for an EIN, but they may do so if desired.

Advantages Of Getting An EIN

In general, applying for an EIN separates your business from your personal finances as it simplifies any bookkeeping and accounting processes. You might wonder if you need to renew your EIN yearly: the answer is no. EINs do not expire so you don’t have to get them renewed once you obtain one.

Even if you are not required to apply for an EIN (like sole proprietors, for instance), you might consider acquiring one because sometimes, not getting an EIN may cost you more in the future. Here are some benefits of an EIN number.

Avoid Tax Penalties

An EIN is basically a tax ID number assigned by the IRS for tax obligations. However, if you haven’t already obtained an EIN by tax day, you will not be able to file taxes for your business. You have the option to inform the IRS of this predicament, but this may delay your filing, and result in penalties for late returns. Keep in mind that when you keep accurate records, file, and pay your taxes on time, you are able to avoid tax penalties. Timely record-keeping, timely payment of taxes, and complying with tax laws can help you avoid tax penalties.

Prevent Identity Theft

If you are wondering if an EIN can protect you from identity theft: yes, it can.  An EIN separates all personal finances from business finances.  Once you have obtained your EIN, you do not need to give your Social Security Number to clients or vendors who you collaborate with. As we all know, your SSN is strictly confidential. Carelessly sharing this information will increase the chances of identity theft and access to your profits.

Open A Business Bank Account & Speed Up Loan Applications

An EIN allows you to speed up loan applications as long as you have all the necessary information to conduct your business. Therefore, you should get an EIN if you are planning to take out a loan. Some lenders may require you to have a business bank account with deposits, which is where an EIN comes in handy. Most banks require business owners to have an EIN in order to open a business bank account. (Note: Some banks allow sole proprietors to open a business bank account without an EIN, but this varies as some have stricter policies.)

Establish Business Credit

Business credit is proof of your company’s track record in timely bill payments and proper financial management. Why should you keep a good credit score?

●       It helps in your business loan applications.

●       As your business credit increases, you will gain more access to funding for your business (eg: loans, credit cards, and other financing options)

●       You can negotiate better payment terms with your customers, suppliers, and vendors.

Let’s say your personal credit score hasn’t been the best. When you use your EIN to apply for credit, it will show up solely on your business’ credit report. This means none of your bad personal credit history will affect your business’ credit score, making way for all the benefits above. Obtaining an EIN will work in your favor in this case.

Hire Employees

If you plan to hire employees, then you are required to have an EIN. Can you apply for an EIN even if you have no employees? Yes, you may. It is hard to predict when you might hire in the future but as your business scales and you need to delegate work to a team, getting an EIN earlier could be a good thing. An EIN will ease your hiring process, from setting up payroll to hiring your first employee.

Protects Personal Assets

Obtaining an EIN for your business can help protect your personal assets by establishing your business as a separate legal entity. If a lawsuit arises, your personal assets are protected. However, some personal assets can be at risk if you are unable to pay your business loan or lease which was personally guaranteed by you. Engaging in fraudulent or illegal activities may also hold you liable regardless of your business structure. Overall, while the EIN protects your personal assets, do consider adopting proper business practices or liability insurance to protect your assets and yourself.

How Do You Acquire An EIN?

Now that we’ve illustrated the benefits of an EIN number for your business, you can start applying for one. You can do it yourself on the IRS website, but you don’t have to. We’re here to help.

Next Page »

Benefits Of Using An External Filing Service To Obtain An EIN

Benefits Of Using An External Filing Service To Obtain An EIN

One of the earliest administrative tasks for any business or organization is to apply for an Employer Identification Number (EIN). The EIN is a number issued by the Internal Revenue Service (IRS) to identify businesses in the U.S. for tax purposes.

Applying for an EIN is a procedure that involves several steps and requires relevant paperwork and documentation. You can obtain your EIN alone, but you don’t have to.

This article explains the 4 main benefits of using an external filing service to obtain the EIN. It will make the process faster and smoother, save you time, and increase your chances of getting the EIN approved.

Introduction – Importance Of An EIN For Businesses

You may be unsure of what an EIN is and whether you need it. According to IRS regulations, an EIN is required by businesses and organizations that are conducting business in the U.S. and file certain tax returns, such as excise taxes on goods or services.

Obtaining an EIN is not only beneficial but a necessary step for businesses. If you want to do the following, you will need an EIN:

●       Open a business bank account

●       Apply for a business loan and/or credit card

●       Hire employees

●       Apply for business permits or licenses

●       File federal and/or state tax returns

An external filing service acts as a third-party designee, helping business owners apply for the EIN for a small fee. Let’s go over the advantages of hiring an external filing service provider.

Expertise – Familiarity With EIN Application Process

As we all know, paperwork can be extremely tedious. In the process of applying for an EIN number, you will have to fill out endless forms, furnish supporting documents, and send those to the IRS. Sometimes applicants who go at it alone will get their EIN application rejected due to special characters or symbols in their form, mismatched information, or unanticipated system errors. This is no fun.

On the flipside, if you leave this mundane task to a third-party designee that has successfully applied for EINs for thousands of businesses, you know you will be in good hands. Since they are experts who are very familiar with the EIN application process, they are up to date on the exact requirements, timelines, and documents needed, as well as do’s and don’ts. This means there will be no errors on your application, leading to faster and higher chances of EIN approvals.

Convenience – Time-Saving Benefits

As a business owner, it can seem like there’s an endless running list of things to do. And everything is a priority. But smart business owners will know that no man is an island. This may be a hard pill to swallow for independent entrepreneurs, but you cannot do everything yourself.

Outsourcing allows you to focus on your business growth instead of admin tasks like applying for a federal tax ID number. To apply for an EIN, the entire process can take up to a week, from gathering information and documents to filling out the form and submitting it to the IRS. By hiring an external filing service, you get to save time as they will take care of the process for you and manage any back-and-forth communications with the IRS.

Faster Processing – Compared With Direct IRS Application Processing Times

Hiring an external filing service provider to apply for your EIN puts you at the forefront compared to businesses that are navigating the process independently. They are bound to hit more speed bumps in the application process, which could result in an error, leading to a rejected application. Then, they’ll need to restart their application wondering what went wrong.

By going through an experienced third-party designee, you get an expedited external review of your Form SS-4 (Application for Employer Identification Number). With best practices applied, this will increase your chances of getting the EIN. If your online application is approved, you’ll receive your EIN number within an hour of submitting it.

Benefits For International Applicants – Navigating The IRS Application Process For Non-US Residents

Applying for an EIN is drastically more challenging for non-U.S. residents who want to register their businesses here. Foreign individuals who have a U.S.-based business or organization can only apply for their EIN by fax, phone, or mail, which have longer processing times of up to 4 weeks. There are also other factors to consider such as whether the applicant has a valid Taxpayer Identification Number or not.

An external filing service provider can be of tremendous assistance to non-U.S. residents and ease any anxieties around the EIN application. They can answer any questions, provide advice, help you fill out the form correctly, and make sure your application arrives at the IRS seamlessly. It takes the hassle out of navigating the complex IRS rules and regulations, especially as a non-U.S. resident.

Considerations When Selecting A Service Provider

When selecting a third-party designee to apply for your EIN, here are 5 things you should consider:

●        Legal compliance: The service provider should be registered and licensed so that you get peace of mind knowing your application is being handled by a trustworthy entity.

●       Expertise and experience: Seek a service provider that’s experienced in filing EIN applications for businesses in your industry. Check if their website has a resource center for business owners. This usually demonstrates their expert knowledge on business tax and EIN matters.

●       Cost: Consider the cost of the service provider’s fees and how they compare to other providers. Service providers with very low fees may not provide the level of guidance and expertise that you need, while higher fees usually indicate a better reputation and quality of service.

●       Turnaround time: Check that the service provider’s turnaround time aligns with your timeline. The last thing you want is for the application process to negatively impact your business.

●       Communication and availability: Ensure that the service provider is available to answer your questions and provide support throughout the application process.


With years of experience in handling EIN applications across various industries, we possess the knowledge and expertise required to navigate the EIN application process.

Let us help you get your EIN applications sorted out and approved. If you are still exploring your options, click here to learn more about applying for an EIN.


Next Page »

The Difference Between An EIN And A State Tax ID Number

 The Difference Between An EIN And A State Tax ID Number

If you are an owner of a business or an organization that has to file tax returns, you may know that you need to apply for a tax ID number. You may have come across the terms EIN and State Tax ID Number, but how are they different and which one applies to you?

In this article, we address commonly asked questions about State Tax ID Numbers vs EIN. By the end of this post, you’ll know exactly which ones your organization needs to apply for.

What Is The Purpose Of Tax IDs?

Annually, businesses operating in the United States are required to pay business tax to the government. This is where tax identification numbers or tax ID numbers come in.

Tax IDs are to businesses what Social Security Numbers (SSNs) are to individuals – they serve to identify the business or organization paying taxes. The IRS needs this number to distinguish one entity from another since they cannot be distinguished solely by their names.

Tax ID numbers exist at the federal level, for federal taxes. We call this the EIN (Employer Identification Number). They also exist on the state level, for… you guessed it – state taxes. We will dive deeper into the differences in this article.

Which Businesses Need Tax IDs?

Now, let’s talk about which businesses need tax IDs and which ones don’t. Just a heads up: we are referring to the federal tax ID, used for paying taxes to the federal government. Every state has unique regulations around state tax IDs, so please check with your Secretary of State.

So, which types of entities need to obtain a federal tax ID? Organizations that hire employees, withhold taxes on income, or file certain tax returns (Employment tax, Excise, Alcohol, Tobacco, or Firearms tax) need to obtain one.

The Internal Revenue Service (IRS) lists these entities as mandatory to have a federal tax ID:

●       Limited Liability Company (LLC)

●       Partnership

●       Corporation

●       Trust

●       Estate

●       Non-profit Organization

●       Church Organization

Sole proprietorships, where the business entity is one with the individual, file taxes using their SSN. This means they do not need to obtain an EIN, even though they can. Filing for an EIN as a sole proprietor or freelancer has its benefits.

Are Federal And State Tax IDs The Same Thing?

You may be wondering, “Is an EIN the same as a State Tax ID?”

They are not the same thing. A federal Tax ID number, which is the EIN, is issued by the IRS for tax purposes. It is also used by banks and licensing bodies. An EIN has 9 digits and is formatted in this way: XX-XXXXXXX.

State tax IDs are issued by the state. This could be the Secretary of State, Department of Revenue, or something else. The format for this number also varies by state. For example, the Texas Comptroller issues an 11-digit ID called the Texas Taxpayer Number. In Colorado, your entity would be given an 8-digit ID called the Colorado Account Number by the Department of Revenue.

As you’ll see, the regulations for State Tax IDs vary by state. We recommend you check with your state when you are registering your business entity.

Do You Have To File State And Federal Taxes?

All business entities need to file some form of federal tax. However, the same cannot be said about state taxes, which again, has a unique set of laws.

Federal Taxes: There are 5 general taxes that a business may need to pay depending on its legal structure. The IRS website explains in detail all of these taxes, but here is a summary:

●       Income Tax – Filed annually by all businesses except partnerships.

●       Estimated Tax – Filed by individuals, including sole proprietors, partners, and S corporation shareholders.

●       Self-employment Tax – A social security and Medicare tax primarily for individuals who work for themselves (freelancers, sole proprietors, etc.)

●       Employment Taxes – For businesses that hire employees.

●       Excise Tax – Taxes that apply for certain goods and commodities as well as any licenses granted to operate certain types of businesses.

State Taxes: Some states do not charge business tax. For instance, Alaska and New Hampshire do not charge income tax or sales tax. Other states that do not charge income tax include Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.

If you are in any of these states, you are exempt from paying state taxes. If you are in a state that does charge income tax, your state’s Department of Revenue or tax website will provide all the necessary information on filing state taxes.

Is An EIN The Same As A Federal Tax ID?

Yes, they are the same. The EIN is also known as:

●       Federal Tax ID

●       Federal Tax Identification Number

●       Federal Employer Identification Number (FEIN)

●       Employer Tax ID Number

How To Register For An EIN

To register for an EIN, applicants must fill up Form SS-4 and provide the required information. Click on the directory below to begin applying for an EIN.

Still have questions? Learn More About Applying For An EIN.

Next Page »

Tax ID Numbers And Freelancers: What You Need To Know

Tax ID Numbers And Freelancers: What You Need To Know

Do I need to pay taxes as a freelancer? Do I need an EIN as a freelancer? Any business operating in the U.S. needs to pay taxes – this is no different for freelancers.

The Internal Revenue Service (IRS) uses Taxpayer Identification Numbers (TIN) as a way to identify individuals in the execution of tax laws. A Taxpayer Identification Number may be issued either by the Social Security Administration (SSA) or by the IRS.

Your Social Security Number (SSN) is issued by the SSA, whereas other Tax ID Numbers are issued by the IRS. As a freelancer, you may either use your SSN or EIN to file taxes.

What Is An EIN?

An Employer Identification Number (EIN), also known as a Federal Tax ID Number, is a unique identifier for business entities, similar to that of SSNs for individuals in the United States. EINs are issued by the IRS and allow the IRS to easily identify businesses and track their tax responsibilities. They are made up of nine digits, formatted as XX-XXXXXXX. EINs are commonly used by employers for tax reporting purposes.

Businesses can apply for an EIN directly through the IRS. Business entities must apply for an EIN by phone, online, fax, or mail before they can begin operations. You must have an EIN if you:

●       hire employees

●       operate as a corporation or partnership

●       file a select list of tax returns

●       withhold taxes on income paid to non-resident aliens or any other income other than wages, or

●       are involved with a number of types of organizations such as trusts, estates, non-profits, and more.

So as a freelancer or independent contractor, where do you fall on this spectrum?

Do Freelancers Need An EIN?

You may be wondering, “Do I need an EIN as a freelancer?” First things first, a freelancer is a sole proprietor. They produce goods or services on their own without hiring any employees.

Most business structures need an EIN, but as a sole proprietor, there is slightly more flexibility. Technically, freelancers who operate on their own do not need an EIN. If you are a freelancer, you do not need an EIN to file taxes as you can just use your SSN.

With that said, should you get an EIN as a freelancer conducting business in the U.S.? There are many benefits to obtaining an EIN as a freelancer – let’s go over why you should. 

Why Should Freelancers Get A Federal Tax ID Number?

As a freelancer, it is beneficial for you to obtain an EIN for several reasons. For starters, a Federal Tax ID Number that is separate from your SSN will allow you to have a different identification number that can be used solely for your business tracking purposes, potentially limiting the risk of identity theft.

An EIN is also useful for opening a business bank account which could make it easier for you to manage your finances. Having a business bank account will allow you to make and receive payments relating to your freelance business into a bank account that is separate from your personal finances.

Getting an EIN for freelancers is also helpful for filling up W-9 forms should you go into any work that is worth more than $600. Once again, this will allow you to share an identity number for tax reporting purposes that is separate from your SSN. This is especially helpful if you are wary of sharing your SSN with businesses or clients that you only have one-off projects with.

How Can I Get An EIN As A Freelancer?

It is easy to apply for an EIN as a freelancer. The EIN application can be done directly through the IRS over the phone, online, by fax, or by mail. The method through which you apply depends on your location and resident status. (Only businesses located in the U.S. or U.S. territories can apply for an EIN online.)

Applying for an EIN is fairly easy and uncomplicated. To start, you will need to fill out Form SS-4: Application for Employer Identification Number which you can find on the IRS website. You will be required to share some information with the IRS.

First, you will need the name of your company’s principal officer, partner, trustor, owner, or any other title, along with their personal taxpayer identification number (that is, your SSN). Additionally, the application asks for the type of entity you are running, the reasons for applying for an EIN (such as registering a new business, change of organization, or IRS withholding requirement compliance), the start or acquisition date, and the principal industry of business.

Once all the information provided in the online application has been validated, your EIN will be provided immediately or within the hour. Applications by fax or mail can take from 2 to 4 weeks to be processed.

Next Page »

How to Apply for a Tax ID (EIN) Number for a Personal Service Corporation

237 ITNS How_to_Apply_for_a_Tax_ID_(EIN)_Number_for_a_Partnership__

Almost every type of business needs an Employer Identification Number (EIN). Your business will use this number for employee tax forms, but it’s also critical for a wide range of other business operations such as filing corporate income tax returns and opening bank accounts. The process to obtain an EIN can vary based on the structure of your business.

To help you out, this guide explains how to get an EIN for a personal services corporation. If you’re already running a personal services corporation or plan to start one, here is what you need to know.

What Is an EIN?

An EIN is a unique identification number for your business. When you deal with banks or government agencies, this number lets them know who you are. It’s much more precise than using a business name. This is similar to how you use your Social Security Number or tax ID rather than just your name. All kinds of people or businesses may have the same name as you. But no one else has the same EIN or Social Security Number as you.

What Is a Personal Services Corporation?

To qualify as a personal services corporation, your business must meet the following two criteria

  • The majority of the business’s services are personal services. This is a service provided to one person or entity by another person. It’s not a product, an app, or anything tangible. It’s also a certain type of service. For instance, while carpet cleaning or hairdressing doesn’t count as a personal service, accounting does.
  • At least 95% of the company’s stock is owned by employees who provide services, retired employees who used to provide services, an estate of a current or retired employee, or anyone who inherited stock in the corporation due to the death of an employee or retired employee in the last two years.

Personal services include health, law, engineering, architecture, accounting, actuarial science, performing arts, and consulting. If your business doesn’t provide these services and doesn’t meet the stock ownership rules noted above, it is not a personal services corporation.

Why Does Your Personal Services Corporation Need an EIN?

When you own a personal services corporation, you need to pay yourself like a W2 employee. Even if you are the sole owner of the company, you still have to pay yourself as if you are an employee. To do so, you need an EIN.

In contrast, if you perform personal services but your company is a sole proprietorship, you just take the profits from the company. You don’t have to make monthly or annual payroll tax deposits or generate a W2 for yourself.

A personal services corporation will also use an EIN for the following purposes:

  • To open bank accounts and apply for loans.
  • To file a corporate tax return.
  • To create a pension plan.

When you apply for an EIN, you have to note why you need the number. In the course of running your business, you will use an EIN for a range of purposes. Simply choose the reason that applies the most now. Often, the reason will be that you are starting a new business or changing the structure of your business. For instance, if you’ve been providing personal services as a sole prop, but now you want to be a corporation, you’ll choose “changing your business structure”. If you’re just launching the business, you’ll choose “starting a new business”.

How Do You Get an EIN for a Social Services Corporation?

Once you’ve established that your business is a personal services corporation, you can apply for an EIN online or through the mail. Applying online is the fastest option. But if you want a lot of time to fill out the form and you don’t care how soon you get your number, then the mail can work just fine.

What Information Do You Need to Get a Personal Services EIN?

Luckily, the information you need to obtain an EIN for your personal services corporation is pretty straightforward. Most business owners can gather the information they need in an hour or less or even in a few minutes. You might have most of the information available in your personal memory.

When you apply for an EIN for your business, you need to answer several questions. Here is an overview of what to expect and tips on how to address each question.

  • What is the legal name of your personal services corporation? This is the name you created when you formed the corporation in your state.
  • What is your doing-business-as name? If you use a different name for signs and marketing, you need to provide that as well.
  • What are your business’s contact details? This includes your address and phone number.
  • Who is the responsible party? This will usually be you or another person who owns part of the personal services corporation. You also need their tax ID number.
  • Is your personal services corporation also an LLC? If so, include your number of members and date of organization.
  • What is your business type? You should just note “personal services corporation” for this question.
  • Which state were you incorporated in? This is the state where you sent in your formation papers.
  • When did you start or acquire your business?
  • What’s the last month of your accounting year? For personal services corporations, this will be December because you’re required to use a fiscal year.
  • How many employees do you have? Make sure that you know how many employees are general, household, or agricultural.
  • Do you expect to pay more than $1,000 in employment tax this year? If you plan to pay more than $4,000 in wages, the answer is yes. For most businesses, this is yes.
  • What type of service do you provide? As explained above, personal services only fall into a few different categories.

If you have the information to answer the above questions, you’re ready to apply. Once you apply for the EIN, you will get it pretty quickly. Online, you can often get the number the day or day after you apply. Then, you can start using it right away. There’s no waiting period.


Next Page »

Apply For A Trust EIN Number

234 ITNS Apply For A Trust EIN Number

Trusts play very important roles in estate plans and wealth management. If you create a living trust (also called revocable trusts), it will receive your assets after your death. This will allow your heirs to avoid probate, and it can also minimize the potential of estate taxes. While a will just allows you to distribute your assets to your heirs, a trust lets you set up conditions and distribute the assets over time.

You don’t have to wait to transfer assets to a trust until after your death. In some cases, you can transfer assets to a trust while you are still alive. In this situation, a trust can also have numerous benefits such as shielding assets from creditors or transferring income from certain assets or businesses from you to the trust.

Regardless of why you are setting up a trust, you will need to obtain an EIN. This guide is designed to answer your questions and walk you through the process.

Frequently Asked Questions

We hear a lot of different questions about EINs for trusts. Whether you’re creating an irrevocable trust or nearly any other type of trust, you will need an EIN number. To help you out, we’ve put together answers to commonly asked questions about trusts and EINs.

What Is A Trust?

A trust is a financial arrangement between three parties: the trust administrator, the grantor, and the beneficiaries. The grantor (aka trustee) sets up the trust. The beneficiaries benefit from the trust. Typically, they are either people or charities. The administrator runs the trust. They follow the wishes of the grantor. There are many different types of trusts for a wide range of purposes.

Do You Need A Tax ID Number For A Trust?

All trusts need a tax ID number (EIN) except grantor trusts and IRA trusts. However, grantor trusts need an EIN if they don’t file using the Optional Method. IRA trusts need an EIN if they’re required to file Form 990-T (Exempt Organization Business Income Tax Return).

What Information Do You Need To Apply For A Trust EIN?

To apply for a trust EIN, you need to know the type of trust, the trustee’s name, the trustee’s Social Security Number, the address of the trust, and the grantor’s Social Security Number. If the trust employs people, you also need the number of estimated employees and if you anticipate owing more than $1,000 in payroll tax during the year.

Can I Obtain My Tax ID Number Via Mail Or Fax?

Yes, you can apply to obtain an EIN for a trust through mail or fax. In both cases, you will need to fill out a paper EIN application. Then, you will need to wait for the IRS to process the paperwork and send you an EIN in the mail. Even if you apply over fax, the IRS will still mail the number to you.

How Long Does It Take To Get A Tax ID Number For A Trust?

The waiting time to receive a trust EIN depends on how you apply. If you apply for this tax ID number over fax, it takes about two weeks to get your number. If you apply through the mail, processing can take six to eight weeks. An online EIN application is very fast. Applying can take less than a half hour and you usually get the number right away.

Apply for a Trust Tax ID (EIN) Number

Now that your main questions have been answered, let’s look at how to apply for an EIN for a trust. The best option is to apply online, but whether you apply online or using fax or mail, you will need to work through these seven steps.

1. Provide Contact Details About the Trust

This section of the online EIN application asks for basic details about the trust. This is information that the government needs to contact you about your EIN. It includes the legal name of the trust. For example, this might be Henry Simpson Family Trust.

This section also needs the address of the trust and the name of the trustee. You also must note the name of a responsible party (usually this is the trustee) and their Social Security Number. Note that the trustee is another word for the trust administrator.

2. Note the Type of Entity

All kinds of entities such as businesses and nonprofits use EINs. There are a lot of options in this situation, but you should select trust. You will identify your entity as a trust. Then, you will note the Social Security Number of the grantor. The grantor is the person who sets up the trust.

3. Supply Information About Incorporation

Trusts cannot be incorporated so you will answer that the trust is not a corporation. If there are any follow-up questions about incorporation, you will note “non-applicable” or “N/A.”

4. State the Reason for Applying for an EIN

In this section, you also have lots of choices. Several different choices may apply. However, the best option is to note that you are applying because you are creating a trust. You also need to note the type of trust. For instance, you will explain if it’s an IRA trust, a living trust, or another type of trust.

5. Don’t Get Confused About the Wording “Date Business Started”

Don’t worry. The government knows that your trust isn’t a business. This is just boilerplate language used on the EIN application. When you see this question, just note the date that the trust was established or is going to be established.

6. Share Employee Details If Applicable

In the relatively rare case that your trust is going to be employing people, you will need to provide information about your employees. You should note the number of employees. Then, you should note if you want to file payroll tax annually. Typically, you can only do this if you expect to pay less than $1,000 in payroll tax during the year. If you pay more than $4,000 in wages, you won’t qualify to file annually.

7. Ignore Other Business Questions

You may see a few more business-related questions on the EIN application. They may include questions about your principal business activity or the types of products/services you provide. Again, this doesn’t apply to trusts so you don’t need to worry about this section.

This is all you need to do to apply for an EIN for a trust. Note that you can only apply for one EIN number per day. As soon as you get the number, you’re ready to go. You can finish setting up your trust and start using the number.


Next Page »

How to Apply for a Tax ID (EIN) Number for a Non-Profit Organization

234-How to Apply for a Tax ID (EIN) Number for a Non-Profit Organization


Applying for a tax ID number, also known as an employer identification number (EIN) , is a simple process that can be completed online, by fax, or by mail. But the easiest method is always going to be to send in a form online, usually through a third-party EIN company.

Let’s take a look at why a non-profit organization might need an EIN and how they can get one.

What is a Non-Profit Organization?

A non-profit organization is defined as a company that uses its surplus revenue to achieve its goals, rather than distributing it among shareholders. Non-profits can be religious, charitable, educational, scientific, or literary in nature. They can also be political organizations or sports clubs.

Why Does a Non-Profit Organization Need an EIN?

There are a few reasons why a non-profit might need an EIN. The most common reason is to open a business bank account. Many banks will require an EIN in order to open up an account for your organization.

An EIN is also required if you have employees. You’ll need to withhold taxes from their paychecks and file quarterly tax forms. An EIN is also needed to apply for a business license or permit.

EINs may also be needed to purchase goods tax-free. Many vendors who sell to non-profits will require an EIN in order to extend the tax exemption.

How to Apply for an EIN

As we mentioned earlier, the easiest way to apply for an EIN is online. You can also apply by fax or mail, but the online method is going to be the quickest.

Here’s the step-by-step process:

  1. Gather the required information. You’ll need the name and address of your organization, as well as the names and Social Security numbers of your principal officers.
  2. Choose an EIN company. There are a few different companies that can help you obtain an EIN.
  3. Complete the online application. This will usually involve filling out a short form with your organization’s information.
  4. Receive your EIN. Once your application has been processed, you’ll receive your EIN via email. Make sure to keep this in a safe place, as you’ll need it for tax purposes.

Applying for a tax ID number should only take minutes and you should receive your EIN within a few hours.

What Happens If Your EIN is Rejected?

If you apply for an EIN and your application is rejected, don’t worry. This happens from time to time. The most common reason for rejection is that the Social Security number of one of your principal officers is entered incorrectly.

If you do receive a rejection, simply resubmit your application with the correct information. You should receive your EIN within a few hours.

This is another reason why it’s best to do this online. If you do it online, you’ll be able to reapply within minutes. If you do it through fax or mail, you may not even know that your EIN has been rejected until much later.

Do You Need an EIN Even If You Aren’t For-Profit?

If you’re not sure whether your organization needs an EIN, the safest bet is to apply for one. It’s a simple process and it’s free. Even if you don’t need an EIN right now, it’s better to have one on hand in case you need it in the future.

EINs are not just for for-profit enterprises, they’re also for a host of other things, such as filing taxes, opening bank accounts, and hiring employees.

Do You Need an EIN Even If You Don’t Have Employees?

If you don’t have any employees, you may not need an EIN. However, there are certain situations where you might still need one.

For example, if you’re going to open a business bank account, the bank will probably require an EIN.

An EIN is a lot like a social security number for a business. So, if your non-profit organization ever needs a credit check or to take out loans, you’ll still need an EIN.

Can You Get an EIN Later?

You can apply for an EIN at any time. However, if you’re already running your non-profit organization without one, you can wait until you actually need it. While there’s no harm in not having an EIN, there could be harm introduced if you find that you need one and need to wait to get one. For instance, if you need to get a loan but find out that you have to apply for an EIN first.

It doesn’t cost anything to maintain your EIN. You apply for the EIN once and it’s yours forever, as long as your entity exists and remains active. So, there’s no real reason not to get an EIN as early as possible, even if you don’t know whether you’ll need it.

Are There Limits on EINs?

No, there are no limits on the number of EINs that a single organization can have. However, each EIN can only be used for one account. So if you have multiple businesses, you’ll need to get an EIN for each one.

The only potential limit to an EIN is the fact that you will need to wait between getting multiple EINs if you need to get a lot of them in one day. You can only have a few EINs assigned to you each day if you’re acting as a representative on each form.

Conclusion: Get Your EIN Right Away

As a non-profit organization, you should get your EIN soon after creating your entity. This will make it much easier to open a bank account and apply for licenses and permits. Start applying by filling out an application online today.

Next Page »

What Is An EIN Number and How To Apply?

230 What Is An EIN Number and How To Apply (1).docx

Nearly everyone who owns a business needs a tax ID number for their business. This number is called an employer identification number (EIN), and it’s critical for a wide range of business functions including opening a business bank account, filing employee tax forms, and more.

To help you out, we’ve created a guide on how to apply for an EIN number. This post covers basic concepts related to EINs and outlines the process of how to obtain an EIN number.

Frequently Asked Questions

People who are launching a business for the first time have a lot of questions about EINs. We’ve collected some of the most common questions and included their answers in this section.

Is A Tax ID Number The Same as an EIN?

An employment identification number is a type of tax ID number. There are different tax ID numbers for different situations. For instance, most US citizens and permanent residents use their Social Security Number as their taxpayer identification Number. Similarly, business owners use the EIN as the tax ID for their business.

Are There Other Common Acronyms for EINs?

There are several different names for EINs. Sometimes, people call EINs Federal Employer Identification Numbers (FEIN). That is because the federal government issues these numbers. Your business may get a different number from your state for state withholding or sales tax accounts. Others refer to these numbers as business tax IDs or federal tax identification numbers (FTIN).

Do I Need a Tax ID Number?

If you’re a business owner, you need a tax ID number. The tax ID number or EIN serves as a unique identifier for your business. For banking purposes, this nine-digit number is more accurate than using your business’s name, and many banks require it for business loans and accounts. It is also required on all employee tax forms, corporate tax returns, partnership returns, and many other government forms.

How Do I Get an Employer Identification Number?

To apply for an EIN number, you can use Form SS-4. You can also hire a tax professional to help you, but the fees can be high. Alternatively, you can apply online. In most cases, an online EIN application is the easiest and fastest option.

Do I Need an EIN If I’m Self-Employed?

Self-employed people often need EINs but not always. If you hire an employee, you need an EIN. You also need an EIN if you hire an independent contractor subject to withholding. If you want to separate your business and personal finances, most banks require an EIN if you want to open an account or apply for a loan in your business’s name. Even if you don’t need an EIN now, you may want to apply for one so that it’s ready to go when you need it.

How Do I Look Up My EIN Number?

You can look up your business’s EIN by finding the confirmation letter you received when you requested the number. You can also look for the number on old tax or bank forms where you wrote down the number. It may be on tax notices or business licenses from the government, or you can pull a credit report for your business and see if it shows your EIN. If you cannot find your EIN on any of your business paperwork, you can call the government and request to receive the number.

Apply For A Tax ID (EIN) Number

Now that you understand the basics, you’re probably wondering how to get an EIN number. You can apply for an EIN number through the mail, fax, or online. If your company is based in a foreign country, you can complete the EIN application over the phone, but generally, you must call Monday through Friday during business hours.

Applying for this taxpayer identification number online is the fastest and easiest option. However, you still need to complete several steps.

7 Steps to Help You Apply for an EIN Number Online

To help you prepare, we’ve outlined a step-by-step application process.

  1. Provide contact details about your business. You need the legal name, the doing-business-as (DBA) name, and the address of your business.
  2. Note the responsible party. For instance, for sole proprietorships, the sole proprietor is the responsible party. For partnerships, it’s one of the partners. In all cases, the responsible party must be an individual. The responsible party cannot be a business entity.
  3. List the taxpayer ID of the responsible person. Depending on their unique status, this may be a Social Security Number (SSN), an Individual Tax Identification Number (ITIN), or an EIN.
  4. Note whether or not the business is a limited liability company (LLC). Sole proprietors, partnerships, and S-corps can also register as an LLC. The other business structures are for tax purposes, while an LLC is primarily for legal purposes. An LLC is a state registration, and you must note when you filed your LLC on the EIN application.
  5. Choose your type of business structure. You may select from sole prop, partnership, corporation, personal services corporation, church, church-controlled organization, or other non-profit organization. However, it’s not just businesses that use this number. You may also choose from estate, plan administrator, trust, military/National Guard, farmer’s cooperative, state/local government, federal government, or Indian tribal government, if applicable.
  6. Select the reason for applying. Most businesses use this number for multiple purposes. Just choose the option that’s the closest to your immediate need.
  7. Make estimates about your number of employees. You can also check a box if you want to pay employment taxes annually instead of quarterly, but you can only qualify to do this if you expect to pay less than $1,000 in payroll taxes throughout the year.

Get Your EIN Number Right Away

Now that you know how to get an EIN number, it’s time to gather your details and start applying. As soon as you receive the number, you can start using it. There is no delay.

When you complete the application process online, you can often get your tax ID number right away. In contrast, phone and fax applications can take several days, and mail applications can take weeks.

When you’re a business owner, time is money. Save time by applying for an EIN online. Then, you’re ready to apply for loans, open bank accounts, file tax forms, and handle everything else that requires this number.

Next Page »

Apply For A Sole Proprietor EIN Number

Apply For A Sole Proprietor EIN Number

Almost all businesses need an employer identification number (EIN). This is a nine-digit number that identifies your business to banks and on government forms. However, the EIN application process varies depending on the structure of your business. To help you out, this guide explains how to obtain an EIN for a sole proprietorship.

Frequently Asked Questions

New business owners have all kinds of questions. They have to deal with countless challenges when they open their businesses. Luckily, obtaining an EIN is relatively simple. To show you how easy the process is, we put together answers to some of the most frequently asked questions about this topic.

What Is A Sole Proprietor?

A sole proprietor owns their own business. They don’t have partners or shareholders.

When they file their tax return, they generally report the profits and losses on a Schedule C that they include with their personal tax return. Business entities that fall into this category include unincorporated small businesses and freelancers.

When Does a Sole Proprietor Need An EIN?

A sole proprietor needs an EIN so that they can hire employees. They also need one if they’re going to collect excise taxes. In most cases, sole proprietorships also need an EIN for banking purposes, including opening a business banking account or applying for loans in the business’s name.

Why Apply For An EIN If It Isn’t Required?

Even if you don’t need an EIN right away, your business will need one in the future. By applying for an EIN when you open your business, you ensure you have it when you need it. Then, you don’t have to deal with a delay when you want to hire an employee, apply for a loan, or do other tasks that require an EIN.

How Many EINs Can a Sole Proprietor Have?

A sole proprietorship (the business) only needs one EIN. But a sole proprietor (the owner) can have multiple EINs. They can have an EIN for every business they own. However, you can only apply for one EIN per day. If you need multiple EINs, you will need to apply on several different days.

How Long Does It Take To Get An EIN For A Sole Proprietorship?

Processing time for EIN applications varies based on how you apply. If you apply for this taxpayer identification number through the mail, it can take four to six weeks. It may take longer if the Internal Revenue Service is backlogged. If you apply using fax, the IRS will mail you a number in a couple of weeks.

The fastest option is EIN applications online. If you apply online, you should get the number that day or the next business day.

Apply For A Sole Proprietor Tax ID (EIN) Number Online

The online application is the fastest way to get an EIN for a sole proprietorship. Here is an overview of the steps you need to follow to get this number.

1. Provide the legal and DBA names of your sole proprietorship.

The legal name of many sole proprietorships is the name of the owner. Then, you may also have a doing-business-as name that you use on your signage and marketing materials. Make sure you understand what your legal name is before you start the application.

2. List yourself as the responsible party.

You must list a responsible party and their Social Security number. Even if you want an accountant to file the EIN application form for you, you will still be listed as the responsible party.

3. State why you want the EIN.

You need to explain why you want an EIN. For instance, if you need the number to open a business banking account, you will note that as your reason. Similarly, if you’re hiring a new employee, you will list that as your return.

4. Specify your type of business entity.

The application lists a variety of business entities. You should choose sole proprietorship when you fill out the online application. If you have registered your business as an LLC, you are still a sole prop for tax purposes. As a result, you should mark sole prop as your business entity. Then, you should note that you’re an LLC and the date you registered the LLC.

5. Share your principal line of business.

You will also need to note your industry and describe your main products or services. You don’t have to be overly detailed in this section. You just need to note the basics. For example, you might note hospitality if you own a hotel.

6. Note your number of employees.

Even if you don’t have any employees now, you need to estimate how many you’re going to hire over the next year. You should note the number of general, household, and agricultural employees on your form.

 7. Declare if you want to file payroll tax returns annually.

In most cases, you will file your payroll returns quarterly, but if you think that you will pay less than $1,000 in payroll tax over the next year, you can use your EIN application to note that you want to file payroll returns annually.

Once you put in all the required details, you’re ready to submit the application. Then, you should receive your EIN very quickly. It will be auto-generated on your screen, and you don’t have to wait for the mail to come to receive your EIN number.

Next Page »