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Federal Tax Id for non-US business

Date: 09/24/2020 | Category: | Author: Martin Pouzar

Federal Tax Id for non-US business

An Employer Identification Number (EIN) is a Federal Tax Identification Number that is required by entities conducting business in the USA. The primary purpose of the EIN is to identify a business entity so that it can be taxed accordingly by the Internal Revenue Service (IRS). This holds true even when you are living abroad and are considering EIN for non US business.

Introduction to EIN for Non-US Business

If you own a non-US business and are wondering what is the primary requirement for conducting business in the U.S then this is the right guide for you. An EIN (Employer Identification Number) is a Federal Tax ID Number that most businesses whether based in the US or outside require. This guide has been created specifically to answer some of the common queries pertaining to EIN for non US businesses and to provide relevant information on the requirements for non US businesses to apply for EIN, the process of application, and how it is different from other forms of Tax ID like ITIN and SSN.

EIN (Employee Identification Number) or Federal Tax Id number

The Internal Revenue Service (IRS) taxes international business entities as well as foreigners living within the U.S or resident aliens, and non US residents on the income earned within the country. This income is considered to be US sourced income and hence has to be taxed. In order to pay taxes, such business entities should possess a Tax Identification Number, which is also known as an Employer Identification Number. The Employer Identification Number or EIN for non US businesses is issued by the IRS and ensures such businesses are able to comply with tax reporting or withholding obligations related to any international transactions.

What is an EIN?

An EIN is a unique nine-digit Employer Identification Number that is also known as the Federal Tax Identification Number or the Federal Employer Identification Number (FEIN). This unique number is assigned to different forms of businesses by the Internal Revenue Service (IRS). EIN is used for reporting of employment taxes by business entities and is also considered as a way of identifying the entity. An EIN for a non US business is also issued by the IRS if the entity in question has a US sourced income that is subject to withholding.

Why do I need an EIN for a non US business?

The US is home to some of the largest business corporations, e-commerce, retail, and other companies in the world. In fact, the Fortune 500 companies represent almost two-thirds of the economy of the country with $14.2 trillion in revenue generated. The US is also a global marketplace and hence home to several non US based businesses. If you are a non-US resident planning to start a new business or expand existing business to US markets, there are certain tax requirements that you will be required to consider. One of the important requirements is that of EIN for non US residents or non US businesses.

According to the Internal Revenue Service (IRS), a non-resident individual operating a business in the US that generates income is required to possess either an Individual Taxpayer Identification Number (ITIN) or an EIN for non US residents to indicate on their W-8BEN that they are qualified for any treaty withholding exemptions. The IRS also makes EIN mandatory for any international business owners planning to register a company in the US. An EIN is also necessary for non US businesses as it shows they have a proper legal status and it will be easier for such businesses to open bank accounts.

If you are wondering how to get an EIN then simply click here!

SSN or Social Security Number

One of the most common queries that non US businesses have is whether they are required to apply for a Social Security Number (SSN) in order to conduct their business in the US. There are many who are under the misconception that an SSN is required to apply for an EIN for non US business. So, let us try and understand what an SSN is and whether non U.S residents or businesses require it or not.

What is an SSN?

A Social Security number or SSN is a unique nine-digit number that is issued to mainly individuals. An SSN can only be issued to an individual who is a U.S. citizen, permanent resident, or temporary working resident as governed by section 205(c)(2) of the Social Security Act. The SSN is issued by the United States Social Security Administration (SSA), which is an independent agency of the U.S Federal Government. The primary objective of the SSN was to track individuals but now it is considered as the de facto national identification number for taxation purposes.

It is important to note that EIN for non US residents are issued when such foreigners are involved in starting a business in the USA that generates revenue in the country itself. Similarly, a non US citizen or resident authorized to work in the country can apply to the Department of Homeland Security (DHS) and obtain a Social Security number. The Social Security number is required to work in the US, collect Social Security benefits, and to receive any other government services. The form SS-5 has to be submitted to apply for a social security number.

Do I need SSN to get an EIN for non US business?

The greatest difference between an SSN and EIN is that the former is issued to individuals while the latter is issued to a business. If you are not a U.S Citizen but are planning to register a business in the U.S then you will have to apply for an EIN for non US business and not an SSN. The Employer Identification Number (EIN) can be obtained without a Social Security Number (SSN) although you may require another form of taxpayer identification known as Individual Taxpayer Identification Number (ITIN).

ITIN or Individual Tax Identification Number

A business in the USA may require different types of identification numbers but business owners and employees are often confused when it comes to the Individual Taxpayer Identification Number (ITIN). Some of the most common queries include how this number is different from EIN and whether ITIN is required prior to filing for EIN for non US business. The only way you can derive clarity on ITIN is through understanding what it really is and who really needs this number.

What is ITIN?

The ITIN or Individual Taxpayer Identification Number is a tax processing number that is issued by the Internal Revenue Service (IRS). Similar to EIN and SSN, the ITIN is also a nine-digit number. The ITIN number is generally issued to those individuals that do not have a valid SSN or are not eligible for obtaining a U.S. Social Security Number but according to law, they are required to file an Individual Income Tax Return. You can obtain an ITIN by submitting Form W-7 along with all required identification documents as mentioned by IRS. The important question is whether you will be required to obtain an ITIN for filing EIN for non US residents.

Do I need an ITIN to get an EIN for a non US business?

You do not need an ITIN to apply for and obtain an EIN for a non US business. At the same time, it is an undeniable fact that having an Individual Taxpayer Identification Number (ITIN) can be beneficial. One of the salient aspects is being able to apply for an EIN online. It is also important to understand that ITIN is for individual taxes and not business tax. If you are a foreign based national starting a business in the U.S and are going to pay income tax in the U.S then applying for an ITIN would be beneficial.

Getting EIN without SSN or ITIN

If you are a non US resident planning to register your business in the country; you will be required to apply for business EIN for non US residents. The question is whether it is possible to obtain an Employer Identification Number even if you don’t possess a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN).

How Does a Non U.S. Citizen Obtain an EIN without a SSN or an ITIN?

According to the Internal Revenue Service (IRS), if you are a foreign citizen planning to register your business in the USA, you can obtain your EIN without the need for a SSN or an ITIN. As mentioned previously, both SSN and ITIN are meant for payment of individual taxes. The SSN is for US citizens while the ITIN can be used for both US and non-US citizens. The only drawback is that without an ITIN, you will not be able to file business EIN for non US residents online but you can file for the same using other processes.

In order to file an EIN for a non US business, the owner of such a business will be required to fill and submit IRS Form SS-4 – Application for Employer Identification Number (EIN). You can file the form using any one of the methods as mentioned below:

  • Phone: According to the IRS, an international EIN applicant can receive their business EIN for non US residents by phone. This option is applicable to those who don’t have any legal residence, principal office or agency, or principal place of business in the U.S. You can call the IRS at 267-941-1099 between 6:00 a.m. and 11:00 p.m. (Eastern Time), Monday through Friday, to obtain your EIN.
  • Fax: You can also apply for and obtain EIN for non US businesses by fax. The fax number for filing within the U.S is (855) 215-1627 and that of filing outside the U.S is (304) 707-9471.
  • Mail: You can also file business EIN for non US residents through mail.

Third party designee

A ‘Third Party Designee’ or the “Checkbox” is used in applications for business EIN for non US residents only to fulfill the purpose of authorization. The authorization is provided to ensure the following:

  • The authorization ensures that you have an individual to represent you or your business before the IRS in matters related to federal tax. This includes submission of form SS-4 to obtain an EIN for a non US business.
  • The authorization also allows any non US based individual, firm, or organization to designate an appointee, who can receive or inspect your confidential tax information from the IRS pertaining to the type of tax and periods listed on Form 8821-Tax Information Authorization.

It is important to note that the authority of a third party designee is valid only for a “newly” assigned EIN for non US business.

How does IncParadise help you?

IncParadise is one of the top business incorporation and registered agents in the US. We are focused at providing a range of different business related services that have been created to ensure all your business requirements are fulfilled. We have a team of experienced professionals in place to help you with any query you may have not only on EIN for non US businesses but also other processes related to business formation in any of the 50 states. Our services cover all company needs from new business incorporation to maintaining daily businesses routine, helping with state filings, Foreign Qualification, Reinstatements, and providing virtual address and mail forwarding services among others.

You can directly order business EIN online here!

Difference between Tax id number and EIN

Date: | Category: | Author: Martin Pouzar

Difference between Tax id number and EIN

The life cycle of any startup in the US begins with registration of the entity in a specific state and one of the important aspects of the process is obtaining a Tax ID for business. It is quite commonplace to see businesses being confused about the type of Tax ID they need to obtain and without proper tax id’s one cannot conduct business in the country.

Introduction to Tax ID Number and EIN

Most often than not, businesses are confused about what they should obtain – a tax ID or EIN or both. Different types of businesses have different qualifications for tax purposes and the tax id number and EIN difference makes it easier for business startups to follow the right tax structure. Hence, keeping in mind the queries different businesses have pertaining to their tax qualifications, we have created this knowledge guide that will impart information on Tax ID number, the differences, the types of tax id and what tax id your business requires.

Tax Id number

In the US, a new startup or owners of new businesses have different tax liabilities, which are most often defined by the type of business like a corporation, limited liability company, partnership etc. It is important to understand that a Tax ID for business is a mandatory requirement but at the same time, it is important to understand what it really is and why it is important for businesses.

What is a Tax ID number?

A Tax ID number in the US is also known as the Taxpayer Identification Number (TIN) or Federal Taxpayer Identification Number and is used primarily for tax purposes unlike a Social Security Number (SSN), which is used for an individual’s tax and social security benefits. One of the major Tax ID numbers and EIN differences is the issuing authority. A TIN can be assigned by the Internal Revenue Service (IRS) or by the Social Security Administration while employer identification number (EIN) is assigned only by IRS. The TIN is also a nine-digit number and is required for filing income tax returns.

Why is it important?

The Taxpayer Identification Number (TIN) is assigned to individuals and businesses in the US and they are of different types depending on the individual or business. Taxes in the US are imposed on different levels like the federal, state, and local government level and they are levied on a variety of tangible and intangible assets including property, payroll, income, sales, dividends, capital gains, gifts, estates and imports. Taxes are imposed on individuals as well as business entities, trusts, estates and other forms of organization and such individuals and organizations require a tax ID for business or individuals to file their returns.

If you are planning to start a business then you will have to apply for and obtain a tax ID for business to facilitate income returns. In fact, businesses are required to inform IRS regarding their Tax Identification numbers as well as industry codes. The tax ID is not only useful for income reporting but also for starting a business bank account, setting up a payroll, maintaining a corporate veil, preventing identity theft, and building business credit for maintaining financial stability.

Is EIN and Tax ID the same?

It is quite common for businesses or startups to wonder if there are any tax id numbers and EIN differences as TIN and EIN are both assigned for tax purposes. Just like people are identifiable using different forms of ID like Social Security number (SSN) or driver’s license numbers; similarly, Tax IDs and EIN’s are used for identification of business entities.

When it comes to Tax ID number and EIN difference then what stands out is the fact that the tax ID number TIN is an umbrella term that comprises several different types of taxpayer identification numbers and this includes EIN. So, EIN is basically a type of TIN that is specifically assigned to businesses while the Social Security Number (SSN) and Individual Taxpayer Identification Number (ITIN) are also different types of TIN that are assigned to individuals.

Do you want to save time in obtaining business EIN?

Types of Tax ID numbers

The most common definition of a tax ID number for business or an individual is that it is a special number that is assigned to individuals or businesses for tax purposes or creating an identity. Most startups in the US have to file a business tax return and the taxpayer identification numbers help in the process of filing the return.

There are different Tax ID types some of which may be for individuals while others are assigned to businesses. It is important to identify the right Tax id for your business as it will make filing tax returns easier.

  • SSN or Social Security Number: One of the most common Tax ID types is the Social Security Number (SSN). It is primarily used by individuals, single member LLC’s, and sole proprietors. The SSN is issued by the Social Security Administration (SSA) and you will be required to complete Form SS-5 and submit it to get the unique nine digit number.
  • ITIN or Individual Taxpayer Identification Number: The ITIN or Individual Taxpayer Identification Number is a unique nine digit Tax ID for business and it is issued by the Internal Revenue Service (IRS). You will have to submit Form W-7 to obtain this 9-digit tax ID number. This is another individual tax number and is used by non-resident or resident aliens, their spouses, and dependents or those individuals that are not eligible to obtain a Social Security Number (SSN).
  • EIN or Employer Identification Number: One of the most common Tax ID types for businesses is the EIN or Employer Identification Number. It is also known as the Federal Tax Identification Number and issued by the Internal Revenue Service (IRS). This is also a unique nine-digit number that is applicable to a wide variety of businesses. If your business or activities fall under any of the following then you will have to submit Form SS-4 to obtain an EIN.

    • Businesses that have employees
    • A business corporation or a partnership firm
    • If your business needs to file tax returns on Employment, Excise, or Alcohol, Tobacco and Firearms
    • If you are withholding taxes on income paid to non-resident aliens
    • If you have invested in a Keogh plan
  • ATIN – Adoption Taxpayer Identification Number: This is not a Tax ID for business and is used by individuals interested in domestic adoption. The Adoption Taxpayer Identification Number (ATIN) is a temporary taxpayer identification number assigned to a child being adopted. This holds true in a scenario where the adopting taxpayers are unable to obtain a Social Security Number (SSN) for the child being adopted. This temporary taxpayer number is issued by the Internal Revenue Service and you will be required to file the Form W-7A: Application for Taxpayer Identification Number for Pending Adoptions.
  • PTIN – Preparer Tax Identification Number: An enrolled agent who represents taxpayers before the Internal Revenue Service (IRS) like certified public accountants (CPAs) and attorneys require a PTIN. Preparer Tax Identification Number is one of the Tax ID types for individuals whose job is to prepare tax returns for U.S. federal tax returns or any other related tax form to be submitted to the IRS. You will be required to submit the Form W-12 for IRS Paid Preparer Tax Identification Number (PTIN) Application and Renewal.
  • State-Issued Tax Id Numbers: The need for a state Tax ID for business depends on whether the state you are operating from requires you to pay state taxes. Hence, the requirement for state issued tax IDs varies from one state to another. It is also known as a state tax registration or a state employer ID. This tax ID is required by businesses that are planning to sell goods or services and also if they will be hiring employees.
  • Federal Tax ID Lookup using EDGAR System: The EDGAR system is known as the Electronic Data Gathering, Analysis, and Retrieval system that is used by the U.S. Securities and Exchange Commission (SEC). The EDGAR is considered to be the primary system used by companies for submission of specific information with the SEC as required by law. It is a database of information pertaining to the Commission and the securities industry and is accessible to the public through the Internet. It is especially useful for searching Federal Tax IDs for businesses and helps in providing a company’s operational and financial information.

Tax IDs for Businesses

Most businesses formed in the US require a tax ID number or taxpayer ID. The Tax ID for business is different from an individual taxpayer ID. According to the Internal Revenue Service (IRS), the form of business you are planning to operate will determine the type of taxes you will be required to pay and the type of tax ID you will require.

Which Tax ID is needed for my business?

The type of business structure you have will define the type of income tax return you will have to file but the most common tax ID types that you will have to obtain is the EIN or Employer Identification Number. This is a Federal Tax Identification Number and it will help you to file your taxes with the IRS.

It is important to note that if you are planning to operate a single-member LLC with no employees or a sole proprietorship then your Social Security Number (SSN) will be the tax ID. On the contrary, if you hire employees in your LLC or file excise tax returns as a sole proprietor then you will have to obtain a proper Tax ID for business, which in this case is an EIN. If you are planning to form a Corporation or unincorporated business structures like limited partnerships then you will have to apply for an EIN.

If you are living overseas but want to operate a business in the US then the tax ID types that you may require are Individual Taxpayer Identification Number (ITIN) for individuals and Employer Identification Number (EIN). Most often, ITIN is an option for individuals not eligible for obtaining a Social Security Number (SSN) like non-resident aliens.

How do I get a Tax ID number?

Depending on the type of tax ID required, you will have to submit the required form with either the Social Security Administration (SSA) or the Internal Revenue Service (IRS). If you are applying for an individual tax ID like SSN then it will be issued by SSA and other tax ID types like ITIN or EIN will be issued by IRS. There is a separate application form for each type of tax ID. You will have to download the form from the SSA or IRS website depending on the tax ID required and then submit online or offline. If your business requires you to apply for Employer Identification Number then you can also do it quickly and securely from the IncParadise EIN service portal.

Do you require EIN assistance?

IncParadise is one of the most reputable companies when it comes to new business formation and we can help you with converting your idea into a fully functional startup by providing all incorporation services as well as help in maintaining your business as the registered agent. We not only provide services towards the incorporation process but also assist with various business related processes including EIN services. We have a team of experts who can provide you with information on EIN and how to obtain it. The IncParadise team is easily accessible and can help you with both EIN and EDGAR filings. Our team also holds expertise in providing additional incorporation services like S Corporation filings that will enable your business to enjoy tax benefits.

Get your business Tax ID Number today!

How to Find Your Own or Other Company’s EIN?

Date: | Category: | Author: Martin Pouzar

How to Find Your Own or Other Company’s EIN?

An employer identification number (EIN) is a federal business tax ID number that is issued by the IRS. It is essential for conducting different types of business transactions including tax filing, opening business bank accounts, and applying for small business loans. Then there are times when you may need to check the EIN of another business entity you are dealing with and the process of finding their tax ID number is called EIN look up.

Introduction to EIN

A business tax ID number like the Employer Identification Number (EIN) is used for many purposes and yet it is not used on a day-to-day basis. As a result, you might not remember the number off the hook just like you remember your business phone number or address. So, what happens when you need to use the EIN on business documentation or need to find the EIN of a vendor? This is where an EIN look up will help you to find the tax ID number. There are different aspects, processes, and tools or a resource for finding an employer identification number and this guide has been created to help you understand the different processes involved.

EIN of a Company

An employer identification number (EIN) of a company is one of the important tax ID numbers that is required by different types of public companies, non-profit organizations, and private companies among others. Since, most businesses have to obtain an EIN prior to transacting in any state in the US, you can also use several resources to find EIN numbers for other businesses as well.

What is an EIN of a company?

When you form or register a new business in any state in the US, you will also have to simultaneously apply for the federal tax ID also known as an employer identification number (EIN). This is a mandatory requirement and is issued by the Internal Revenue Service (IRS). This tax ID number is used for identifying a business entity and hence sometimes businesses use EIN look up resources to check their own EIN or that of other companies. There are a wide variety of businesses like Business Corporation and partnerships that require this tax ID number and it is also required when the ownership or structure of a specific business entity has changed.

Why is it important to know your EIN?

An Employer Identification Number (EIN) is a unique nine-digit number, which is primarily used for identification of a business for tax purposes. It is also used for providing tax statements of a specific entity to the tax lawyers. It is important to know your EIN because once you have this business tax ID number, it may fulfill a wide variety of purposes including filing of tax returns. Sometimes, you may require this business tax ID number for a loan application or for any other important business requirement like application for business license or even to hire employees. In such a scenario, if you don’t remember the number, you can find the EIN number using different resources. The bottom-line is that if you are unable to remember your EIN number when filing an important document then the filing may get delayed, which could be unprofitable for the business.

EIN Look up: Finding your company’s EIN

An EIN look up is a process by which you can find this unique nine-digit business tax ID number of your company as well as any other business in the US. There is always a probability that you may need to find the EIN of another company you are planning to do business with. There are other times when you may need to find your own EIN for an important business related application. There can be any number of reasons why you may need to find your business tax ID number but the question is how you go about looking up your EIN.

Find EIN number from EIN confirmation letter

One of the ways to find an EIN number is with the help of the employer identification number (EIN) confirmation letter. In order to understand what the confirmation letter is and how do you find EIN, let’s look at an example:

You have formed a company and applied with the IRS for an employer identification number. You want to open a bank account for business transactions and your bank asks for a confirmation regarding the issue of the EIN. In such a scenario, what do you do? This is where the form CP575 comes to the rescue. Yes, this is a form that will help you find an EIN number so that you can provide it to the bank.

When a business applies for an EIN by submitting Form SS-4, the Internal Revenue Service (IRS) issues a Form CP 575 after two weeks post approval to confirm that an Employer Identification Number (EIN) that has been issued for the business in question. The Form CP 575 contains the EIN number allotted to a business and this letter is sometimes used by businesses for EIN look up.

Contact IRS directly to find EIN

One of the most common ways to find an EIN number is by contacting the Internal Revenue Service directly. Most often than not, businesses contact the IRS only when they have lost or misplaced their Employer Identification Number (EIN). You will be required to call the Business & Specialty Tax phone number at 800-829-4933 between 7:00 am and 7:00 pm local time from Monday through to Friday. You will be required to provide identifying information to an assistor and you will receive the information only if you are an authorized person. Authorized persons according to the IRS include a business partner, sole proprietor, corporate officers, executors of an estate etc.

Look in other company documents where an EIN can be found

If you are unable to remember your EIN or have misplaced it then one of the options for business EIN lookup is by trying to find it in other company related documents. Some of the documents where you can search for the employer identification number (EIN) include:

You will be able to find an EIN number in the computer-generated notice that was issued by the IRS after you applied for the tax ID. This is a type notice that confirms that you have applied for an EIN and received it.
You will be able to find your EIN number in a previously filed business tax return.
If you have used your EIN number to open bank accounts, applied for loans, or for filing state and local business licenses then you will find the tax ID number in any of the applications filed. You can also contact the bank where you opened an account or applied for a loan to assist you with your EIN lookup.

Do you need an EIN for your company?

Finding another company’s EIN

Why would you need to find the EIN number of another company? The most commonly stated reason includes validation of information provided by another company. Sometimes when one business chooses its vendors, retailers, or partnership businesses, such a business has to provide relevant information regarding its credibility. In order to check their credibility and to find out if the business exists, you may be required to search its Employer Identification Number. There are several ways to find out the EIN, so let’s look at your options.

  • Contact company official directly – The first option for EIN lookup especially for other companies is to directly contact an authorized company representative or official. Such an official would be the company accountant or even an officer in their finance division.
  • Get company’s business credit report – The second option of EIN lookup for other companies is to check their business credit report. You will be able to get a credit report from credit bureaus like Equifax, Experian, and Dun & Bradstreet. A company’s credit report always contains their employer identification number.
  • Look in SEC Filings if company is publicly traded – You can also check the website of U.S. Securities and Exchange Commission (SEC) to confirm whether the company’s EIN you are searching for is publicly traded. Public companies in the US are required to file periodic returns as well as provide updates on their earnings to the U.S. Securities and Exchange Commission (SEC). A company’s employer identification number is present in such documents and by conducting a proper search; you will be able to find the EIN number of any company.
  • Hire any professionals to search for an EIN – If you need to look up your own or another company’s Employer Identification Number then you can also hire professionals with knowledge and expertise in EIN look up. Each professional has their own ways and sources and will conduct in-depth public document or business document search to find the Employer Identification Number of the said company.

EDGAR Filings

EDGAR stands for the Electronic Data Gathering, Analysis, and Retrieval system and it contains a massive database of public companies in the US. The EDGAR system performs a variety of tasks including automated collection of information, indexing, acceptance, validation, and forwarding of any submissions made by public companies as well as other businesses as are required by the law to file specific forms with the U.S. Securities and Exchange Commission (SEC). Public companies and other regulated business entities have to also submit quarterly, periodic, and annual reports to the SEC and hence the EDGAR filings are often used for EIN look up.

What is EDGAR Filing?

EDGAR filing is an electronic filing process that has been created so that public companies and other relevant businesses can submit several types of documents including financial statements, annual reports, and other formal business documents with the Securities and Exchange Commission (SEC). The objective of EDGAR filing is to gather data, analyze it and retrieve as and when required or if specific information is searched for like when you want to find the EIN number of another company.

The aim of the EDGAR filing system is to provide benefit to electronic filers by enhancing speed and efficiency of SEC’s processing, which in-turn ensures financial and corporate information is made available to investors as well as members of the financial community with ease. This information availability means you will be able to also find the EIN number of any public company listed in the system. The EDGAR filing system is geared towards ensuring this type of electronic dissemination generates higher informed investor participation and helps in creating an informed securities market. The Regulation S-T as well as the EDGAR Filer Manual contains the rules and regulations that electronic filers need to follow to ensure proper uploading of corporate or financial information.

Get the help from IncParadise!

An employer identification number (EIN) is used for identifying a business by the IRS similar to an individual being identified by his/her Social Security number (SSN). An individual has to provide their SSN while filing returns and similarly, businesses provide EIN to file returns and hence IncParadise has created a service that caters towards helping you order EIN directly. We have a strong team of professionals that will not only provide information pertaining to employer identification numbers but also guide you through the process. Our team is also committed towards helping you with EDGAR filings for your company including filing of Form ID.

IncParadise believes that every new and existing business has a wide variety of requirements right from applying to a business license to filing annual lists. The business requirements are a driving factor for IncParadise towards creating a variety of additional services. These additional services are targeted at businesses that require assistance with different processes like IRS filing, applying for DBA – Fictitious Name, Certificate of Good Standing, Corporate Kits, Apostille for international entities, Amendments of Articles, mail-forwarding and virtual address services.

Get your Employer Identification Number (EIN) today!

Difference between Tax ID number and SSN (Social Security Number)

Date: | Category: | Author: Martin Pouzar

Difference between Tax ID number and SSN (Social Security Number)

Income or business taxes in the United States have been set up on the federal as well as state level. Taxable income can be categorized under income, gross income including wages, capital gains, sales, excise, and estates among others. Since, there are different types of taxes; the type of tax ID number also varies from individual to business.

Introduction to Tax ID number and SSN

Every working individual and business including small businesses and large corporations are required to pay taxes in the US. Individuals are required to pay taxes on their income and on any real property owned. On the contrary, a business is required to pay different kinds of taxes depending on the type of business, business activity, equipment used etc. Hence, the type of tax ID and tax ID number is different for businesses and individuals. This guide has been created to help you understand the differences, the purpose of each type of tax ID, and how it works.

Tax ID number vs. Social Security Number (SSN)

The most common question asked by businesses is whether their tax ID number is the same as their Social Security number (SSN). This is because there are several instances where some businesses use SSN while others use a Taxpayer Identification Numbers (TIN) to also pay taxes. When it comes to tax ID number vs. Social Security Number (SSN), is there a difference regarding who it is issued to or they are the same and can be issued to both individuals and businesses? In order to answer this question, we need to look at what a tax ID is and how it is different from SSN especially for businesses.

Understanding tax identification number

The Tax Identification Number is also known as the Taxpayer Identification Number (TIN) and it is used primarily for tax purposes in the United States. It is also known as the Federal Taxpayer Identification Number and can be issued by the Internal Revenue Service (IRS) or the Social Security Administration (SSA). The issue and use of this Tax ID number is governed by Title 26 of the Internal Revenue Code and while 26 U.S.C. § 6109 defines identifying taxpayer ID numbers along with sharing of information and safeguards, confidentiality and nondisclosure rules, and sanctions among others.

It is important to understand the purpose of the Taxpayer Identification Numbers (TIN), and when you compare Tax ID number vs. Social Security Number, what type of business requires it.

Purpose of Taxpayer Identification Numbers – TIN

The Taxpayer Identification Number (TIN) is an umbrella term and it comprises several different types of tax IDs. The three most important TIN’s are Social Security Number (SSN), Employer Identification Number (EIN), and Individual Taxpayer Identification Number (ITIN). Apart from these three, TIN also comprises Taxpayer Identification Number for Pending U.S. Adoptions (ATIN) and Preparer Taxpayer Identification Number (PTIN). The purpose of this tax ID number is to ensure that individuals, businesses, or nonresident aliens with taxable income are able to file their tax returns and other related documents with the IRS or the SSA. A TIN number will also be required if you claim a treaty exemption, which will modify or reduce the taxation of income from a variety of sources including annuities, social security, and pension among others.

What is a SSN?

The Social Security number (SSN) is a type of Taxpayer Identification Number that is issued to U.S. citizens, permanent residents in the country, and working or temporary residents. The issue of this nine digit unique number is governed by section 205(c)(2) of the Social Security Act. The SSN is a tax ID number issued by the Social Security Administration (SSA). Its purpose was to track accounts held by individuals within the Social Security program. The SSN helps the Social Security Administration to identify as well as record accurately the self-employment earnings and covered wages of the holders of SSN. Individuals and sole proprietors have to obtain an SSN to file their tax returns.

How does an SSN differ from a Tax id?

When we compare tax id number vs. Social Security Number, the most important aspect that stands out is that SSN is a type of TIN. The major difference between Social Security number (SSN) and any other tax id is that this number is primarily used by individuals for filing taxes while a tax ID number like EIN is used by businesses to file their taxes.

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Social Security Number for Business

A tax id number is a mandatory requirement for a US based business as well as those individuals who have an income in the US. The Social Security number is a nine digit unique number that is normally issued to all citizens of the US as well as permanent and temporary residents. The Social Security number is considered to be a de facto identification number and is listed on individual income tax returns. Although it is issued primarily to individuals, there are specific exceptions as well. For example, certain businesses can use it as a tax ID.

What can business owners use SSNs for?

A tax identification number (TIN) is used for filing tax returns and exists in different forms. A Social Security number (SSN) is a type of tax ID number just like an Employer Identification Number (EIN) is, the difference being the former is for individuals and the latter for businesses. Does this mean businesses don’t require SSN? Some businesses do and they are mostly categorized as “self employed” businesses.

A business owner of such an entity can use SSN to fulfill several purposes like:

  • Filing of income tax return using SSN as a tax ID number
  • Acquiring business credit including a business credit card
  • Facilitating the opening of a bank account
  • Applying for a loan for the business
  • Ensurimg Social Security benefit is available on retirement

SSN for Sole Proprietorship

It is important to understand that in the context of tax id number vs. Social Security Number, the SSN has an exception for businesses like sole proprietorship or single member LLC without any employees. A sole proprietorship is a type of business that is owned and operated by an individual. It is considered to be a “self employed” type of business and doesn’t need to be registered with the state where it is being formed. That being said, the owners of sole proprietorships should have a Social Security number (SSN) for tax as well as legal purposes.

A sole proprietorship is considered to be a “pass-through” entity as the profit or loss incurred by the business will pass through the personal tax return of the owner. The sole proprietorship business actually doesn’t have to pay tax but the owner has to, using Form 1040. The social security number (SSN) is used as the tax ID number because the business and individual is considered to be the same.

Want any assistance? IncParadise can help you!

A Social Security number (SSN) is as important to self employed or proprietorship business owners as an Employer Identification Number (EIN) to corporations and other forms of business. The experience and expertise of IncParadise will not only help in providing information pertaining to any queries you may have regarding a tax id number but also services provided towards fulfilling a variety of business requirements.

We understand taxes can be quite complicated especially for small business owners and hence, we have a team that will work with you to help in obtaining an EIN as well as help you with S status election to derive maximum tax benefits. We also offer a host of additional service pertaining to the varied requirements that new businesses may have in their state of formation.

Starting a Business? Get a Tax ID number (EIN) today!

How do I verify my EIN number?

Date: | Category: | Author: Martin Pouzar

How do I verify my EIN number?

The employer identification number (EIN) is one of the most important nine-digit numbers for new and existing businesses. This number is not only used for identifying the tax status of a business entity but also for filing of tax returns, applying for business licenses, and several other business related activities. If you are a business owner and have misplaced your EIN number then it can cause panic but there are ways of EIN verification that can help you in get this highly important business tax number back.

Introduction to EIN

The EIN or Employer Identification Number is a unique nine-digit number that is assigned to different types of businesses by the Internal Revenue Service (IRS). It is also known as the Federal Employer Identification Number (FEIN) and misplacing an EIN can disrupt many business activities as this number is often required in different types of business documentation. In such a scenario, EIN verification can bail you out of a tough situation and that is exactly what this guide will take you through. This guide will provide an insight into options for conducting verification of your Employer Identification Number.

EIN verification if Lost or Misplaced

There are several instances where new businesses are overwhelmed because their employer identification number seems to be lost or has been misplaced. This can happen to any business or business owner. Yes, losing or misplacing an EIN can put you or your business in a difficult position. Most business owners may feel that they might have to apply for a new EIN since this is a Federal Tax Identification number but that is not the case. The best solution is to opt for an EIN verification process. Let’s look at how this works.

Call IRS support

Since, the employer identification number is assigned by the Internal Revenue Service (IRS), it is important to call IRS support to find the EIN number of the business in question. They have a Business & Specialty Tax department that handles all queries related to finding the EIN number. All you have to do is call 800-829-4933 between their work hours of 7:00 am and 7:00 pm from Monday through Friday. When you call IRS support, an assistor will ask for identifying information and only an authorized person representing the business will be provided with the Employer Identification Number.

Complete IRS Form 2848

The IRS Form 2848 is for Power of Attorney and Declaration of Representative. This is a form that you would require if you are not an authorized representative for receiving the EIN when calling IRS support. If you are not an authorized representative and yet want to find an EIN number then you can request an authorized representative to fill and submit the IRS Form 2848 so that it can be processed. There is however a situation that you may have to deal with, which is the requirement of writing down the EIN in the form itself.

Other ways to confirm an EIN

There are several other ways of finding Employer Identification Number or EIN verification. Some of the most common ways are:

  • Confirmation Letter: If you feel you may have misplaced or lost your employer identification number then you need to search for the confirmation letter. This is a computer-generated notice that was issued to you by the IRS post your application for EIN. The letter is a confirmation of the fact that the IRS has received your application and that they have assigned a nine-digit employer identification number to you. You will be able to find the EIN number on this confirmation letter.
  • Bank Documents: If you have opened a bank account using your Employer Identification Number then you can contact the bank directly to find the EIN number used for opening the account.
  • Other Documents: If you have used your EIN number on any other official or business documents like state or local business licensing documents or bank loans then you will be able to get your EIN number from such documents. You will have to speak with the right authority in the said agency to get this tax ID number.

Apply for your Employer Identification Number- EIN here!

Verify a charitable company’s EIN number

There are times when you want to make a donation to a charitable organization and the best way to check if it is an authentic non-profit is through EIN verification. It is important to understand that a charitable organization is classified as a non-profit business and hence is required to apply for and obtain a Federal Employer Identification Number (FEIN) or Employer Identification Number (EIN). You are probably wondering, isn’t a charitable company tax exempt? The fact is that a non-profit organization will enjoy tax-exempt status from the IRS by filing the application Form 1023 or Form 1023-EZ. Even though they can apply for tax exempt status, they are required to provide the 9-digit EIN assigned by the IRS in their application. So how do you verify the EIN of a charitable company?

No authorization needed – access directly from IRS website

The search for an employer identification number (EIN) of your company or another company may require certain authorizations but that is not the case when it comes to charitable companies. You can directly access the online IRS application to find your EIN number. The online database search can be conducted using specific parameters like the company name, state, and city of operations.

Want any assistance to verify your EIN?

EIN verification can be quite a time consuming and lengthy process and hence IncParadise is there to ensure you receive all the guidance and help required to find the EIN. Whether you are searching for your business EIN that you think you may have misplaced or the employer identification number of another company; we have a dedicated team to help you with the process of Federal Tax ID Lookup. We have created a detailed guide on how to find yours or another company’s EIN, which will help you check your partner´s EIN.

IncParadise can assist with Obtaining a Business EIN!

Can I Use My Previous EIN for a New Business?

Date: | Category: | Author: Martin Pouzar

Can I Use My Previous EIN for a New Business?

Whether you are an entrepreneur or small business owner, there are certain tax considerations that you would have to make while starting your new business in the US. One of the important aspects of any new business is obtaining the right tax ID. Depending on the type of business and requirements as specified by the Internal Revenue Service (IRS), you can transfer EIN or apply for a new employer identification number. Transferring an Employer Identification Number (EIN) refers to the ability to use an existing EIN from an earlier business for fulfilling tax obligations of your new business.

Introduction to EIN for New Business

An EIN or employer identification number or Federal employer identification number (FEIN) is normally assigned by the Internal Revenue Service (IRS) to new businesses that are formed or registered in the United States. The primary purpose of assigning this nine-digit unique number is to identify the tax liabilities of the entity. Normally, when you are forming a business, you will need to apply for a new EIN but in special scenarios for LLCs and partnerships; you can transfer EIN and use it. This article has been created to provide you with information pertaining to when you can use your previous EIN, when a new EIN is required, and the type of business entity it is applicable to and much more.

EIN for LLC

A Limited Liability Company (LLC) is a type of business entity that is created by state statutes. Does this mean you need to apply for a new EIN for the LLC? In order to understand whether you need a new Employer Identification Number or can use an existing EIN, you have to identify the tax election of an LLC.

Do I need a new EIN for an LLC?

If you are planning to start a new business and the entity being formed is a Limited Liability Company (LLC) then you will need to apply for and obtain a new EIN. In fact, most forms of new businesses have to obtain an Employer Identification Number (EIN). There are certain special conditions that determine whether your business entity needs to apply for a new EIN or not. These special conditions include:

  • If your single member LLC is considered by the IRS as a disregarded entity then the income tax return will be filed by the owner using a Social Security number (SSN). In such a scenario, you don’t actually need an Employer Identification Number but if you want then you have to apply for a new EIN.
  • If you have a multi-member LLC or an LLC with more than a single owner then you will require a new EIN
  • If a new LLC with a single owner chooses to be taxed as an S Corporation then a new EIN will be required
  • If a new Limited Liability Company has excise tax or employment tax filing requirements then a new EIN will be required.

There are also some cases in which you can transfer EIN. Some of the special situations where you will not be required to apply for a new Employer Identification Number include:

  • If you convert a partnership firm to a limited liability company
  • If you change the name of your existing LLC
  • If you change the location or primary work address of your limited liability company

Planning to start an LLC? Apply for a new EIN today!

EIN for Corporations

An Employer Identification Number (EIN) is required for most common forms of businesses including C and S Corporations. According to the Internal Revenue Service (IRS), there are specific situations or conditions where a corporation will be required to apply for a new EIN and where they will not.

When a new EIN is required for a corporation?

A business corporation is a corporate structure that has several advantages including tax advantages. It operates as a separate legal entity and the profit is taxed to the corporation. A business corporation is required to pay income tax, estimated tax using form 1120-W, different employment taxes, and excise taxes. If you are planning to start a corporation, you will have to apply for a new EIN in the following scenarios:

  • When a business or private corporation receives a new charter from the office of the secretary of state in the state of its incorporation
  • If you own a subsidiary of a corporation or are planning to become a subsidiary, you will not be able to use the parent corporation’s EIN. You will be required to apply for a new EIN.
  • If you change or convert your corporation to a partnership entity or a sole proprietorship
  • If a statutory merger has led to the creation of a new corporation

When you don’t need a new EIN for a corporation?

There are several exceptions to the rule of application of EIN or to transfer EIN. There are certain circumstances in which a Corporation is not required to obtain new Employer Identification Number (EIN) and they are:

  • If your business is a division of an existing corporation then a new EIN is not required
  • If after a corporate merger, the surviving corporation plans to use the existing EIN
  • If a business corporation declares bankruptcy
  • If the name of the business corporation or its location changes then there is no need to apply for new EIN
  • If an existing corporation elects S corporation tax status
  • If a business corporation undergoes conversion at a state level wherein there is no change to its business structure

You can obtain a new EIN for your Corporation today!

EIN for Partnership

A partnership is a type of business structure that is owned as well as operated by several individuals. A partnership business entity consists of two types, which are general partnerships and limited partnerships. A partnership entity is required to file a “U.S. Return of Partnership Interest” tax return and in order to do so; they have to apply for a new EIN.

When a new EIN is required for partnership?

If you have started a partnership or are planning to register one then in the following scenarios, you will be required to apply for a new EIN.

  • A partnership entity by law requires one to pay taxes and hence when you form such an entity, you will have to obtain a new EIN
  • If your existing partnership transforms from a partnership into a sole proprietorship where the owner was one of the partners.
  • If you incorporate
  • If you end an old partnership and establish a new entity then you will have to apply for a new EIN

When you don’t need a new EIN for Partnership

There are certain scenarios in which you are not required to obtain a new EIN or can transfer EIN and they are:

  • If there is a change in the name of the existing partnership
  • If the said partnership declares bankruptcy
  • If you add new locations or addresses for the partnership or change existing location
  • If a new partnership is formed post termination of an existing partnership under IRC section 708(b)(1)(B)
  • If 50 percent or a higher percentage of the partnership ownership changes hands within a year or 12 month period

EIN for Sole Proprietors

A sole proprietorship business is owned and operated by an individual and is considered to be an unincorporated business. Sole proprietors can file their income tax return using SSN but they can also apply for a new EIN for filing returns.

When is a new EIN required for a sole proprietorship?

An employer identification number (EIN) is not mandatory for sole proprietors although there are certain scenarios in which they may be required to apply for a new EIN. The scenarios are:

  • If your business takes in partners and operates as a partnership entity
  • If the sole proprietorship is subject to any bankruptcy proceedings
  • If you incorporate a sole proprietorship then you will be required to apply for a new EIN
  • If you inherit or purchase an existing business, which is also operated as a sole proprietorship

When don’t you need a new EIN for sole proprietorship?

There are specific scenarios in which a sole proprietorship will not be required to apply for a new EIN and they are:

  • If you operate several or multiple businesses
  • If you change the existing name of your business
  • If you change the address of the sole proprietorship

Transferring an EIN to a new Owner

You have started a business and obtained an EIN but now the same company is going to have a new owner. The question that most business owners ask in this situation is whether it is possible to transfer an EIN to the new owner.

Can I transfer my EIN to the new owner?

The Employer Identification Number (EIN) is a unique nine-digit number that is assigned to business owners or businesses by the Internal Revenue Service (IRS). Generally, each new business being formed or incorporated in the US needs to apply for and obtain this tax ID number. At some point in time, business owners come face to face with the question of whether it is possible to transfer an EIN to a new owner if their business has been taken over or bought by another owner or company. In such a scenario, you will not be able to transfer the EIN as the new owner has acquired the business and will have to apply for a new Employer Identification Number (EIN).

What happens when a business owner dies?

Generally, if a business has new ownership, then according to the IRS, the new owner has to apply for a new EIN. In the event of death of a business owner, whether a new EIN is required or you can transfer an EIN will depend purely on the type of business entity. One such type of entity is a business corporation. If the owner of a corporation dies then such a business remains in perpetuity as long as there is a succession plan. In such a scenario, there will be no requirement for applying for a new Employer Identification Number (EIN).

On the contrary, if you were to inherit a sole proprietorship business where the previous owner has died then you will have to apply for a new EIN. Similarly, in a partnership business or Limited Liability Company, if the owner, partner, or member dies then the business is dissolved and hence you cannot transfer the EIN.

How do I apply for a new EIN?

As a business owner or if you start an LLC or a corporation or partnership, obtaining an Employer Identification Number (EIN) will require you to submit a completed Form SS-4 to the IRS. You can submit the application using various methods like submitting online, through phone or fax, and email. Alternatively, you can save your time and apply for a new EIN online through IncParadise.

Need any assistance in getting a new EIN?

An Employer Identification Number (EIN) is an important part of any business operations as this unique number not only identifies the type of business but also helps in filing of tax returns. If you are a business owner or plan to form a new business then you will require someone to provide you with expert guidance in the matters related to applying for and obtaining an EIN. This is where IncParadise can help you because we have a team of experienced and committed professionals ready to answer any queries you may have pertaining to applying for a new EIN.

IncParadise has streamlined processes that are targeted at ensuring that we are able to provide a host of additional services. Through these varied services businesses will be able to benefit from ease of applying online for incorporation to managing several aspects of overall working of a business including applying for a business license, submission of annual reports, and acquiring a Certificate of Good Standing among others.

Do you want to apply for a new EIN for your business?