To apply for an EIN at the IRS, businesses, and organizations must complete an application process, which we will discuss later in this post.
Starting and running a business or organization involves a lot of administrative tasks, including obtaining the necessary licenses and permits, setting up accounting systems, and complying with various tax laws and regulations.
One of the critical requirements for businesses and organizations is to obtain an Employer Identification Number (EIN). This unique nine-digit number serves as a form of identification for businesses and organizations for tax purposes and is required by the Internal Revenue Service (IRS).
An EIN is similar to an individual’s Social Security number (SSN). It is used to identify businesses and organizations on various tax-related documents, such as tax returns, payroll tax filings, and other tax-related forms.
Without an EIN, businesses, and organizations may be unable to conduct certain transactions, such as opening a business bank account, filing tax returns, and hiring employees.
In the following blog post sections, we will explain what an EIN is, why businesses and organizations need one, and how to apply for an EIN with the IRS.
We will also share tips for a successful application process and common mistakes to avoid when applying for an EIN. By the end of this post, readers will have a comprehensive understanding of EINs and how to obtain one for their business or organization.
Table of Contents
What is an EIN?
An Employer Identification Number (EIN) is a crucial identification number the Internal Revenue Service (IRS) uses to track a business or organization’s tax obligations. A nine-digit number serves as a unique identifier for businesses and organizations.
It is used for various purposes, such as opening a business bank account, filing tax returns, and hiring employees.
An EIN is a Federal Tax Identification Number (FTIN) or a Taxpayer Identification Number (TIN). The IRS assigns this number to businesses and organizations upon their request. It remains the same throughout the life of the business or organization, even if there are changes to its structure or ownership.
Different types of entities may need to apply for an EIN, including sole proprietors, partnerships, corporations, limited liability companies (LLCs), and nonprofit organizations.
For example, a sole proprietor who operates a business under their own name may apply for an EIN for various reasons, such as separating personal and business finances or hiring employees.
In addition, some entities may require an EIN even if they do not have employees. For instance, if a business is a partnership, LLC, or corporation, it is required to have an EIN. Some retirement plans, such as Keogh plans, also require an EIN.
An EIN is a crucial identifier for businesses and organizations to conduct their operations and comply with tax laws and regulations. Businesses and organizations must determine whether they need an EIN and apply for one with the IRS as soon as possible.
Why Apply for an EIN with the IRS?
Its beneficial to apply for an EIN with the IRS, because it can simplify filing taxes for businesses and organizations. With an EIN, businesses, and organizations can easily file and pay their taxes online or by mail without needing a social security number. Applying online can save time and reduce the risk of errors or delays in tax filings.
Another advantage of having an EIN is that it can help businesses and organizations establish credit with banks and other financial institutions.
By having a separate EIN, businesses, and organizations can build a credit history and access loans, credit cards, and other financial services without relying on personal credit.
In addition, having an EIN can make it easier for businesses and organizations to comply with specific federal and state regulations. For example, some states require businesses to have an EIN before applying for a business license or permit.
Its crucial to apply for an EIN with the IRS for any business or organization. It provides numerous benefits, including conducting business, hiring employees, opening a business bank account, filing tax returns, establishing credit, and complying with federal and state regulations.
How to Apply for an EIN with the IRS
There are several ways to apply for an EIN with the IRS, including online, by phone, mail, or fax.
Apply for an EIN with the IRS online:
To apply for an EIN with the IRS online, you must visit the IRS website and navigate to the EIN application page. From there, you must select the type of entity you are applying for (such as a sole proprietorship, partnership, or corporation) and provide the necessary information about your business or organization.
You will need to have the following information on hand:
- The legal name and address of your business or organization
- The name and Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN) of the responsible party (this is typically the owner or principal officer of the business)
- The reason for applying for an EIN
- The type of entity you are applying for (such as a sole proprietorship, partnership, or corporation)
- The date your business or organization started, or the date you acquired it, and the closing month of your accounting year
Once you have entered all the required information, you must submit your application. The IRS will then review your application and assign you an EIN immediately, which you can use to conduct business and file tax returns.
To Apply for an EIN with the IRS online is a quick and convenient way to obtain the necessary identification number for your business or organization.
Apply for an EIN with the IRS by phone:
If you prefer to apply for an EIN with the IRS by phone, call the IRS Business & Specialty Tax Line at 1-800-829-4933. The phone line is open Monday through Friday, from 7 am to 7 pm local time.
To apply for an EIN by phone, you must provide the information required for online or mail/fax applications, such as:
- the legal name and structure of your business or organization,
- the responsible party’s information,
- and the reason for applying for an EIN.
The IRS representative will then input the information into their system and provide you with your EIN immediately.
Remember that applying for an EIN by phone may result in longer wait times due to high call volumes. Having all the necessary information ready and being patient during the call is vital. Additionally, taking notes during the call may be helpful for future reference.
Apply for an EIN with the IRS by mail or FAX:
The process is slightly different if you prefer to apply for an EIN with the IRS by mail or fax. Here are the steps to follow:
- Obtain Form SS-4: The first step is to download Form SS-4, Application for Employer Identification Number, from the IRS website. You can also call the IRS to request that they mail you the form.
- Fill out the form: Fill out the form SS-4 with all the necessary information. Double-check your information for accuracy and completeness before submitting the form.
- Please submit the form: Once you have completed it, you can submit it to the IRS by mail or fax. The mailing address and fax number are listed on the form.
- Wait for processing: After submitting the form, you must wait for the IRS to process your application. This process can take several weeks, so be patient.
- Receive your EIN: Once your application has been processed, the IRS will assign you an EIN and send it to you via mail. Be sure to keep this number safe, as you will need it for all future tax filings and other business-related activities.
It’s important to note that applying for an EIN by mail or fax may take longer than applying online or by phone. However, it is still a valid option for those who prefer not to apply online or by phone.
10 Tips to Apply for an EIN with the IRS
There are several tips to keep in mind to ensure a successful EIN application process.
- Determine the correct legal structure of your business or organization: Before you apply for an EIN, you need to determine the correct legal structure of your business or organization, such as a sole proprietorship, partnership, corporation, or LLC. This information is required on the EIN application.
- Gather all required information: When applying for an EIN, you will need to provide information such as the legal name and structure of your business or organization, the name and contact information of the responsible party, and the reason for applying for an EIN. Gather all this information before you start the application process.
- Double-check all information for accuracy: Ensure all the information you provide on the EIN application is accurate and up-to-date. Double-check everything before submitting your application to avoid any delays or complications.
- Apply during business hours: If you are applying by phone, call during business hours. The phone line for EIN applications is available from Monday to Friday, 7:00 am to 7:00 pm local time.
- Use a secure internet connection: If you are applying for an EIN online, use a secure internet connection. Avoid using public Wi-Fi or shared computers to protect your personal information.
- Have your paperwork ready: If you are applying for an EIN by mail or fax, ensure all the required paperwork is ready before sending it, including a completed Form SS-4 and any supporting documents.
- Don’t use a third-party service: You can apply for an EIN directly with the IRS for free. Avoid using a third-party service that may charge you unnecessary fees.
- Understand the processing time: The processing time for an EIN application can vary depending on your method. Applying online or by phone can provide you with an EIN immediately while applying by mail or fax can take up to four weeks.
- Keep a record of your EIN: Once you receive your EIN, keep a record of it in a safe place. You will need it for various purposes, such as opening a business bank account, filing tax returns, and hiring employees.
- Follow up if necessary: If you have not received your EIN within the expected processing time, follow up with the IRS to ensure no issues or delays with your application.
10 Mistakes to Avoid when you Apply for an EIN with the IRS
- Providing Incorrect Information: One of the most common mistakes when applying for an EIN is providing incorrect information. Ensuring that all information entered on the application is accurate and matches the information provided on other legal documents is crucial. Providing incorrect information can lead to delays in processing the application or even rejection.
- Submitting Incomplete Applications: Another common mistake is submitting an incomplete application. It is essential to ensure all required fields are completed before submitting the application. Incomplete applications can lead to delays or rejection of the application.
- Applying for Multiple EINs: It is important to avoid applying for multiple EINs for the same business or organization. Each business or organization should have only one EIN, and applying for multiple EINs can lead to confusion and potential legal issues.
- Applying with the Wrong Business Entity Type: Choosing the wrong business entity type when applying for an EIN can cause issues. Selecting the correct entity type based on the business structure, such as sole proprietorship, partnership, corporation, or LLC, is crucial.
- Not Checking for Accuracy: It is important to double-check all information for accuracy before applying. Minor errors or typos can lead to delays or rejection of the application.
- Providing Incorrect Responsible Party Information: When applying for an EIN, it is essential to provide accurate information for the responsible party. This person is typically the business owner or a designated officer and is responsible for managing the EIN and tax obligations. Providing incorrect information can cause problems down the line.
- Not Having Required Information Ready: Before starting the application process, it is essential to gather all required information, such as the legal name of the business, the business address, and the social security number of the responsible party. Not having this information ready can cause delays in the application process.
- Applying for an EIN for the Wrong Business: It is essential to ensure that the EIN application is submitted for the right business or organization. Applying for an EIN for the wrong business or organization can cause confusion and legal issues.
- Using an Unsecured Website: When applying for an EIN online, it is crucial to use a secure and official IRS website to avoid potential scams or identity theft. Using an unsecured website can put personal and financial information at risk.
- Not Keeping Track of EIN Information: Once the EIN has been assigned, it is essential to keep track of the information, such as the EIN and responsible party information. Not keeping track of this information can cause issues, such as difficulty filing tax returns or managing tax obligations.
Conclusion: Apply for an EIN with the IRS
In conclusion, an EIN is a crucial identification number the IRS assigns to businesses and organizations for tax purposes. It allows businesses and organizations to conduct business, hire employees, open a business bank account, and file tax returns.
You can apply for an EIN with the IRS online, by phone, mail, or fax. The application process requires basic information about the business or organization, such as its name, structure, and responsible party, as well as the reason for applying for an EIN.
Businesses and organizations must apply for an EIN with the IRS to ensure compliance with tax laws and regulations. Failure to obtain an EIN can result in penalties and other consequences, such as difficulty opening a business bank account or hiring employees.
Businesses and organizations can quickly obtain an EIN by following the tips we provided for a successful application process and avoiding common mistakes.
We hope this blog post has provided a comprehensive understanding of an EIN, why businesses and organizations need one, and how to apply for an EIN with the IRS.
If you have not yet applied for an EIN for your business or organization, we encourage you to do so as soon as possible. An EIN will make it easier for you to conduct business, comply with tax laws and regulations, and avoid potential penalties and consequences.
Gideon van Niekerk
Photographer & Blogger
Transform Your Passion for Photography into a Thriving Career! As a professional photographer with over a decade of experience, I share the secrets of building a successful photography business on my blog. Unlock the Secrets to Starting a Profitable Photography Business Today! Join me on an incredible journey of discovery, where you’ll learn insider tips and tricks to building a successful photography empire. Don’t miss out on this exciting opportunity to turn your passion into profit – let’s embark on this journey together!
