Are you interested in getting your federal tax ID number (EIN)? Your Colorado business, whether it’s a partnership, sole proprietorship, LLC, corporation, nonprofit, or other organization, will likely need to have an official IRS tax identification number for legal and financial purposes. Fortunately, the online EIN application process is fairly simple. This guide will walk you through the steps necessary to get your tax ID (EIN) in Colorado, from the initial information you will need to gather to your final receipt of the tax ID.
Steps to Apply for a Colorado Tax ID (EIN) Online
- Required Information for a Tax ID
- Apply for Your Colorado Tax ID Online
- Use Phone, Mail, or Fax to Apple for a Colorado Tax ID
- Do You Really Need a Tax ID Number or EIN?
- What’s the Best Way for a Small Business to Obtain a Tax ID Number?
- Do You Need to Get a Colorado State Tax ID Number?
1. Required Information for a Tax ID
Applying for a tax ID online can be relatively easy, but only if you take a few proactive steps to prepare for that application. Getting a tax ID requires you to register your business with the federal government, so you’ll need to provide several pieces of information to complete the process. Fortunately, these should already be available to you. You’ll need to provide your full legal name and legal address, as well as the full legal names and addresses of any other business partners you have. You’ll also need all those founding members’
social security numbers (SSNs) to complete the tax ID application.
2. Apply for Your Colorado Tax ID Online
When you’re ready to begin the tax ID application, you can choose between a handful of different application mediums. While traditional application methods exist, it’s much easier and more convenient to apply for your tax ID online.
Any device with an internet connection can access the online application. This makes it much more convenient than, say, tracking down a paper application. If you have all the right pieces of information on you and your founding members, you can complete the application in as little as 5 minutes.
When you’re done with the application, you’ll receive your tax ID in an hour or less. This makes the online application much faster than any other application method, and the ideal choice for any business owner who wants to get their company started as quickly as possible. This is the recommended tax ID application method for all businesses, regardless of size or structure.
3. Use Phone, Mail, or Fax to Apple for a Colorado Tax ID
Other methods of applying for a tax ID do exist, but none of them are as fast or as convenient as applying online. Most of these other methods are relics of traditional application processes, before the internet was available. For example, you could apply over the phone, providing key information on your founding partners with a live representative. You could also write out a physical application and mail it or fax it to the right authorities. As you can imagine, these methods are time intensive. If you use them, it could take up to 6 weeks to process your application.
4. Do You Really Need a Tax ID Number or EIN?
You may wonder whether your business truly needs to have a tax ID number. The short answer is that most businesses will require a tax ID, and others will simply benefit from having one (even without a formal requirement).
"Tax ID" is the simple name for your federal tax ID number, which is a 9-digit number meant to identify your business uniquely with the federal government. You can think of it as a type of social security number, but for businesses. This is also called an employer identification number, or EIN.
This number is required of any business that’s going to have multiple partners. Therefore, if you’re running a partnership, an LLC with multiple people, or a corporation, you’ll certainly need to have one. This is also a requirement of any business that plans on hiring employees.
EINs are also used for many financial applications. Your bank will likely mandate that you have one before you can apply for a loan, a bank account, or other accounts related to your business. Some other businesses may also request that you provide one before completing contracts or other legally binding agreements. Most business license applications also require one. Even if you don’t formally require one, EINs can be helpful for managing paperwork related to your business.
5. What’s the Best Way for a Small Business to Obtain a Tax ID Number?
If you’re running a small business or if you’re new to the world of entrepreneurship, you might be confused about how to get a tax ID number for your business. The basic formula is always the same for small businesses, no matter which method you choose; you’ll answer a few questions about your business and your founding members, then wait to receive your tax ID.
The best approach for a small business is to apply online. Assuming you have access to your founding members’ names, addresses, and social security numbers (SSNs), you should be able to finish the online application in a matter of minutes. When you’re done with the online application, you can get your tax ID by email in an hour or less. If you apply using any other method, like applying via phone, mail, or fax, you could be stuck waiting 4 to 6 weeks.
6. Do You Need to Get a Colorado State Tax ID Number?
Your federal tax ID number is important, but your business may also require a Colorado state tax ID number. This may sound like the same thing, but it’s a fundamentally different number, assigned by the state government of Colorado.
A Colorado state tax ID number is required of any business selling taxable goods and services in the state. You may also need one if you’re going to hire employees in the state of Colorado. To get one, you’ll follow a process similar to the one you used to get your federal tax ID. Once you have your federal tax ID, you can begin applying for your Colorado state tax ID online or through a traditional application method. Like with your federal tax ID, applying online will get you your tax ID much faster. You should be able to receive your Colorado state tax ID in just 4 to 6 weeks this way.