An EIN or better known as Employer Identification Number is commonly referred to by many people as the social security number your business. The importance of having a employer identification number is critical for the development of your business by allowing you to not only esestablish tax records for maintaining your businesses expenses and paying your taxes to the IRS. The Ein also ensures that you can separate your personal expenses from that of the business and vice versa. Applying for an EIN is now easier than ever!
What Are Some of The Benefits of Having a Employer Identification Number ?
Having a EIN can benefit you business in many ways, not only do you now have the freedom to start in the process of branding your new business and focusing on developing how your business will be growing, you will now be able to setup a bank account at your local financial institution or credit union so you can now start to accept payments and deposit from your clients in a more professional manner. Another huge benefit of having your employer identification number (EIN) established is you can also focus on building credit for your business which will then help you with managing cash flow and keeping reducing risk for your new business.
What is the Difference Between an Employer Identification Number & Tax Identifcation Number ?
There is no true difference between a EIN number and a tax id number most people become confused when people are referring to them by one of their many other names. We have compiled a list to assist with being able to identify some of the more common names.
What are the Different Types of Business Structures?
The IRS recognizes many different business structures, and as a new business owner you will need to not only understand the different types of businesses, you will also need to identify which one is best for you.
Sole Proprietors – One of the most common and popular business structures in the United States and the reason for this is sole props are usually operated by one person or a sole owner who primarily operates the daily business activities by themselves and are not yet ready to expand or do not plan on it.
Corporation – A corporate business structure is a little more complex than a sole proprietorship, because a corporate structure is made up of multiple signers that are all responsible for managing the daily activities and expenses of a the company. Corporation can also hire employees, that can be really useful in developing the companies growth.
Partnership – An agreement existing between two and sometimes more individuals , who will not only share equally in the earning of the company but any monetary loses and other expenses that should arise .
Limited Liability Company (LLC) – An Limited Liability Company is a business structure similar to a Corporation, where the company is able to hire new employees and participate in 401k plans , the real major difference is that the Authorized signers or representatives of the company cannot be held responsible for the business losses or any miss dealings. (you can sue the company, but not them,)
Estate – Estates are more commonly used for the deceased individuals who owned multiple properties or assets that will need to still be maintained or sold after or before death.
Trust – Most likely established for the benefit of someone who is either unable to mange assets left to them by the deceased, weather it be due to the age (minor child) or the mental complicity of the person, most Trust account or managed by lawyers or a law firm.
Non-Profit– Non for Profits are organizations that are just that, they are not being opened for financial gains and the primary income of non-profits is through donations and charitable events. Most common non-profits are your local churches, Goodwill’s, Consignment stores and even credit unions.
How Do I Apply For an EIN Online ?
There are over five ways to go about applying for a EIN number and really based upon your comfort level, each way is a excellent way to go about obtaining your IRS tax id number.
Mail– Believe it or not you can actually compete a tax documentation form called the SS-4 application for and mail it into the
Internal Revenue Servic
Attn: EIN International Operation
Cincinnati, OH 45999
Be mindful this process can take up to several weeks for the IRS to provide you with your Employer Identification number (EIN)
2. Fax– You can also send your EIN application/ SS-4 form to the Internal Revenue Services via fax this process is much faster than mail because the IRS will receive the document much faster giving you a quicker turnaround time for you Employer id to be delivered.
Fax: (855) 215-1627 (within the U.S.)
Fax: (304) 707-9471 (outside the U.S.)
3. Phone – Ordering Your Employer Identification Number on the Phone is also a very efficient way to not only obtain your ein, you can also call the IRS directly were you will be able to speak with an IRS agent who can walk you through the process of completing you SS-4 Application form and sending it in to be processed.
(Hold times can be in some cases greater than 30 minutes
IRS Contact# 267-941-1099
4. Ordering Ein Online– Possibly the best way of completing this process is by simply ordering you Employer identification number is by completing a fast 30 minute application form and getting your tax number in days and not weeks
5. Lawyer– You can also request your tax identification number through a local law firm or a lawyer, this process is also very simple because the attorney will be taking care of the process for you, but in most cases you can be charged anywhere from 200-500$ to have this done.
6. 3rd party– Using a 3rd party expert is also very effective because not only are you able to have an expert take care of the process of ordering completing your EIN application for processing, they are a fraction of the cost of dealing with any lawyer and in most cases you don’t have to deal with the IRS at all and your Employer identification is delivered in most cases in hours.