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If you are starting a business or considering hiring employees for the first time, you may have heard about an Employer Identification Number (EIN). An EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify your business for tax purposes. Here is a step-by-step guide to help you obtain your EIN number.
Step 1: Determine Your Eligibility
Before applying for an EIN, you need to ensure that your business is eligible. All types of businesses, including sole proprietorships, partnerships, corporations, and non-profit organizations, are eligible to apply for an EIN. However, if you are a sole proprietor with no employees, you are not required to have an EIN. You can use your social security number instead.
Step 2: Gather Required Information
To complete the EIN application, you will need to gather the necessary information. It includes your legal name, Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), business name, business address, and business structure. If you have multiple partners or members, you will also need the SSN or ITIN of each partner.
Step 3: Choose Your Application Method
The IRS provides three methods to apply for an EIN – online, mail, or fax. The online application is the fastest and most convenient option. It is available on the IRS website and can be completed in a matter of minutes. The mail and fax options require you to fill out Form SS-4 and send it to the appropriate IRS address or fax number.
Step 4: Complete the Application
If you choose the online application method, visit the IRS website and click on the “Apply for an EIN Online” link. You will be directed to an online application form where you can provide the required information. Ensure all the details are accurate before submitting the application.
If you prefer to apply by mail or fax, download Form SS-4 from the IRS website. Fill out the form manually using the information you gathered in Step 2. It is essential to answer all questions as accurately as possible to avoid delays in processing your application.
Step 5: Submit the Application
Once you have completed the online application or filled out Form SS-4, you are ready to submit your application. If applying online, you will receive your EIN immediately after submitting the application. Make sure to note down your EIN for future reference.
If you choose to mail your application, send it to the appropriate IRS address indicated on Form SS-4. Keep in mind that mailing your application might result in a longer processing time, typically four to six weeks.
For those opting to fax the application, refer to the appropriate IRS fax number provided on Form SS-4. The faxed applications generally receive an EIN within four business days.
Step 6: Update Your Records
After receiving your EIN, it is crucial to update your records accordingly. Notify your bank, potential business partners, and any other relevant entity about your new EIN. This update ensures seamless processing of tax returns, opening business accounts, and obtaining business licenses.
In conclusion, obtaining an EIN for your business is a crucial step towards establishing your identity for tax purposes. By following this step-by-step guide, you can easily navigate the process and ensure compliance with IRS regulations. Remember to keep your EIN safe and handy for any future tax-related operations.
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