EMPLOYEE IDENTIFICATION NUMBER (EIN)
ALL YOU NEED TO KNOW
Every citizen in the USA has a Social Security Number (SSN), which plays a key role in identification of the individual
residents and similarly, there is an Employee Identification Number (EIN), which is used for identification
of business entities formed in the country.
What is an Employee Identification Number or EIN?
The Employee Identification Number or EIN is a nine digit unique and permanent number. It is also known as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number and it is assigned to a business by the Internal Revenue Service (IRS). This Tax ID system was first created in 1974 by the IRS through a Treasury Decision (TD) and is essential towards paying employees of a business as well as for filing business tax returns.
One of the important questions is – Do all types of businesses require an EIN? According to IRS, if the answer to specific questions is “Yes” then you will require this number. Questions like – do you have employees or do you have a Keogh plan or if the type of business is specifically an LLC or a Corporation are answered.
Features and Benefits of EIN
If you are planning to set-up a new business in any State, what could be the advantages or benefits of this Tax ID system?
This Unique identification number is highly useful for businesses as it helps you in performing different types of business operations or transactions with ease. You can use the EIN for:
- Opening a Business Bank Account for the first time
- Applying for and getting a Business Loan
- Getting a business credit card
- You can ask your vendors for payment regarding the services or goods provided by your company. The vendors will ask for a W-9 form prior to making payment as this form provides the vendor with information related to tax returns. The EIN will have to be mentioned in the W-9 form to identify your business.
- It will aid in applying for Government permits, licenses or even contracts
- It will help you in building business credit, which is something your future vendors and suppliers will check prior to working with you.
Apart from these features, the Employee Identification Number has many benefits that businesses can enjoy. Some of the primary benefits are:
- EIN helps in avoiding tax penalties: One of the most important aspects of the ‘Employee Identification Number’ is that it helps you to pay your taxes on time and thus avoid any penalties levied by IRS due to non-payment of taxes.
- It helps prevent identity theft: Yes, identity theft can not only hurt the ‘goodwill’ of your business in the long-term but also make it nearly impossible for the business to operate. Since EIN is used only as a federal identifier, it will ensure your business or corporate identity is safe.
- Preserving limited liability for single-member LLCs: Are you planning to set up an LLC? One of the salient aspects of establishing an LLC is that you will not be held personally liable for any business related obligations or debts arising from your business. The Employee Identification Number can help separate your business liabilities from personal liabilities and this in-turn ensures preservation of limited liability if at all your business gets sued.
Get Business Ready today by Applying for EIN!
How to get my EIN or Tax ID?
Are you wondering what the process is towards acquiring the Federal Tax ID or Identification Number? Here’s a step-by-step approach towards how you can apply for the Employee Identification Number:
- Step #1: You have to start by identifying your eligibility status
- Step #2: You can apply for EIN at the IRS website or download the Form SS-4.
- Step #3: Submit the filled form online or submit the form through mail or fax
Although you can apply directly from the IRS website, the information required in the form and technicalities for submission can make it cumbersome and often a confusing process.
The alternative is to order this service from IncParadise, so that you can relax as we will go ahead and submit the EIN application along with all the information required on your behalf.
I have an EIN. Do I need a new one?
If you have a business in any of the U.S States and possess an Employee Identification Number, will you need another one? If you already have a Federal Tax ID then you won’t require another one unless:
- You are changing or converting from one form of business entity to another. For example, from a Sole Proprietorship or Partnership to a Corporation.
- Your business has declared bankruptcy and this is valid only for partnership and proprietorship
- You can change the location or physical address of the business entity or add other locations.
- If a business corporation receives a new charter from the respective secretary of state
- If a statutory merger creates a new corporation or business entity then you will have to apply for a new EIN
Do you need any help? We can help you get your EIN easily?
If you feel that the process of applying for an EIN is cumbersome or confusing then we can make it simpler by helping you. As one of the most reliable registered agents in the country, IncParadise can help you obtain this ID, absolutely hassle free!
Take Advantage of our Special EIN Services!
IncParadise, one of the most reputable agents in the country offers a “Full EIN service” at just $45. As a part of this Employee Identification Number application service, we will apply on your behalf and get you this unique Federal Employer Identification Number within the shortest processing time.