How To Apply For a Tax ID Number?

How To Apply For a Tax ID Number?

If you operate a business the IRS may require you to obtain an Employee Identification Number (EIN), which is also referred to as your business tax ID number. Each EIN is unique in the same way that your Social Security number is. The number allows the IRS to identify your business and requires you to provide it on all of your tax documents and forms. Fortunately, the IRS makes it very simple to obtain a new EIN.

business tax id number

Do I Need a Tax Id Number ?

If the  business you are planing on establishing is going to hire workers, withholds taxes on the wages and salaries it pays or you operate the business as a LLC or partnership, then the IRS will most likely make  you to obtain an employer identification number (AKA) Tax id. An EIN number is also necessary for estates, trusts and non-profit organizations, to name just a few. However, if you operate a sole proprietorship, you can still obtain an EIN and use it in the same way even though it’s not required.

How Should I Apply For My Tax Identification Number

You can apply for your tax id number by fax, phone or mail; however, the IRS prefers that you submit your application online. When you do, you can receive your EIN immediately after completing the short ss-4 application. You can also obtain your tax id number through the IRS website for free.

What The IRS Will Ask

The first question requires you to select the type of EIN you are applying for such as a sole proprietorship, corporation, LLC, partnership or estate. You then need to choose the option that best describes why you are applying for an EIN. This can be to start a new business, for banking purposes or for a range of other reasons. The online questionnaire then requests your name and Social Security number before you can finish your application.

Completing Your SS-4 Application Online

Once you complete all sections of the application, the system will generate a new EIN that you can begin using immediately. An official IRS document will load onto your computer, which confirms that your application was successful and provides your EIN. It’s a good idea to save a copy on your computer and to print one for your records in case you forget the EIN.