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.

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.

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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.

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.

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.