Starting a new business can be incredibly exciting, but the process also requires a lot of hard, time-consuming work. To avoid unexpected administrative bumps in the road, you should obtain a tax ID (EIN) number for your business as soon as possible. Then, you have the information you need to fill out a variety of paperwork, including important tax forms and financial documents. Wondering how to get a tax ID (EIN) number for a new business? Then, keep reading to learn the essentials of how to apply for a tax ID (EIN) number for a new business online or via mail or fax.
Steps to Get a Business Tax ID (EIN) Number
- Prepare Owner Information
- Apply for a Tax ID (EIN) Number for a New Business Online
- Apply for a Tax ID (EIN) Number for a New Business via Mail or Fax
- Why Do I Need a Tax ID (EIN) Number for a New Business?
- How Do I Get a Tax ID (EIN) Number for a New Business?
- How Long Does It Take to Get a Tax ID (EIN) Number for a New Business?
Whether you complete the process over the internet or apply for a business tax ID number via mail or fax, you need to provide some details about yourself and the business on the application. Luckily, the information you need is fairly straightforward, and you should be able to prepare owner information relatively quickly.
As the owner of the business, you are responsible for information related to your business’s EIN, so you need to provide your name and social security number (SSN). If you do not have a social security number, you can use your Individual Tax Identification Number (ITIN). Similarly, if a trust, a c-corporation, a partnership, or a variety of other types of organizations is the Responsible Party for your business, you can provide the Employer Identification Number (EIN) for that entity on your application.
If you are the responsible party but you want to designate another individual such as a bookkeeper, an accountant, an administrative professional, or anyone else to receive information about your new business’s EIN, you can also note that on your application, but you should remember to include the phone number, fax number, and address for this individual as well.
On top of that, you also need some key details about your business. In particular, you need to know your business structure (sole proprietorship, partnership, corporation, personal service corporation, non-profit, etc.). You also need your number of employees, the closing month of your accounting year (if you use a calendar year, that is December), and how much you expect to pay in payroll tax for the year.
Be prepared to note the principal activity of your business. You can choose from a list of options such as construction, real estate, manufacturing, finance, healthcare, and others, but if you don’t see the right category for your business, you can write in your own answer. Finally, you have to explain why you need an EIN.
If you want your tax ID as quickly and easily as possible, you should apply online. To do that, you need to gather the information noted above. Then, you should find a service that can help you process an online application.
In most cases, you fill out the information, and you get the tax ID for your business that same day or the very next business day. Then, you can start using your EIN on government forms, banking documents, or anywhere else you need it. To learn more about why do I need a tax ID (EIN) number for a new business and to see an overview of how you use these numbers, check out the details in section four.
Not everyone wants to apply for a tax ID online, and if you fit that description, you can apply for a tax ID (EIN) number for a new business via mail or fax. With both of these options, you must obtain a paper tax ID number application. Then, you can follow these steps:
- Print out the application
- Fill out the details on the application
- Sign the EIN application
- Fax or mail the application
- Wait for your EIN to be returned to you over fax or mail
Now that you know the answer to how do I get a tax ID (EIN) number for a new business, you might be wondering if you even need this number. For most new businesses, the answer is yes. You need an EIN if you plan to hire employees. You put your new business’s EIN on your employee’s tax forms as well as on the payroll tax forms you send to the government.
If you plan to hire your children to work for your business, you don’t need to pay Social Security contributions or Medicare premiums on their wages, which means you typically don’t need to remit payroll tax to the government. But, at the end of the year when you generate their W2 forms, you do need an EIN. Similarly, if you hire independent contractors from other countries, you may need an EIN for tax documents related to them as well.
Although this number is called an employer identification number, you also use it in a variety of other situations. In particular, if you need to pay excise tax, you need an EIN. You also have to put your EIN on banking forms if you plan to open an account or apply for a business loan. Sometimes, the structure of your business dictates that you need an EIN. For instance, S-corporations need an EIN.
To review, here are the options if you’re wondering how do I get a tax ID (EIN) number for a new business. You can apply online, over fax, or through the mail. If your business is based in a country outside the United States, you can apply over the phone, and in fact, only businesses based in other countries can use the phone for their application.
You may be surprised at how quickly you can get an EIN. How long does it take to get a tax ID (EIN) number for a new business? With an online application, you can get your number the same day or the next business day. Over fax, the process takes about four days, and through the mail, you should get your number within four weeks.