As a Partnership, you may be wondering if or when you need to obtain a Tax ID (EIN) number. As a Partnership, you could be in a situation where you are a company with just you and your partner or partners. You may not have any official employees. Does this mean that you do not need a Tax ID (EIN) number? The answer is no, as it is still a requirement you need to be on top of at all times. The need for the Tax ID (EIN) number is due to several circumstances, including doing basic tasks such as just opening a bank account in the name of the Partnership. It is important to understand the business requirements about an employer identification number, as well as having a full grasp of the application process from top to bottom.
Steps to Applying for a Partnership Tax ID
- Mandatory Partnership Information Needs
- Follow the Online Application Process
- Understanding the Phone, Mail, and Fax Application Methods
- Just How Do I Obtain the Tax ID (EIN) Number?
- Tax ID (EIN) Processing Times
- What is Business Need?
- Conclusion
1. Mandatory Partnership Information Needs
Before you can go through with the application process for a Partnership Tax ID or EIN number, you need to come up with all of the mandatory information needs being asked by the Internal Revenue Service. These information needs will include details on the Partnership as well as the naming of one responsible party from the Partnership.
The responsible party will be one member of the Partnership that will be the lead contact for the Internal Revenue Service. He or she will be spearheading all of the questions from the IRS, helping submit the actual application, etc. It can only be one person. The responsible party will need to provide details to the Internal Revenue Service including their name, address, as well as Social Security Number. In its place, you could also have and submit an Individual Taxpayer Identification Number or ITIN.
The Partnership itself also needs to provide basic information such as the name of the organization, the date the Partnership formed, as well as some basic activities the Partnership takes on, similar to the information required to open a bank account for a partnership.
2. Follow the Online Application Process
The easiest way to complete an application for a Tax ID (EIN) number is to go use the online application process. When you are a Partnership, you have the option to apply over the Internet. There are options to apply via mail, fax, or telephone, which we will get into later, but the online application is the quickest and easiest by far.
With the online application, you can go through the application process very quickly. In the majority of cases, you can work with a Tax ID service professional to complete the application in less than 20 minutes and then have your Tax ID (EIN) number back to you within one hour.
3. Understanding the Phone, Mail, and Fax Application Methods
There are options if you are not able to go through with the online application process. One of the main reasons why you may not be able to apply online is if you do not reside in the United States or that you have a headquarters that is outside of the U.S. The other options pertaining to the phone, mail, and fax application methods should be understood so you can figure out which is right for you.
If you fall into the scenario where you have a headquarters outside of the United States or you have a situation where you live outside of the U.S., the phone application method may be your best choice to start with. You begin by calling the Internal Revenue Service to go over your needs for the Tax ID (EIN) number. Based on your location and situation, they will then give you instructions to send them follow-up documents. You can then submit then via mail or fax to complete the full application.
The mail and fax application methods are pretty much the same in that you need a paper application form. You should work with a Tax ID service professional to be sure you fill out the form in full and with adequate detail. From there, you are going to be packaging up the application form itself, any supporting documentation, and sending it to the Internal Revenue Service. One of the ways to do this is via the mail, while the other is with a fax machine. Both options will work but you need to remember processing times will be far extended beyond the online application form processing period.
4. Just How Do I Obtain the Tax ID (EIN) Number?
If you are still curious as to how exactly you obtain a Tax ID (EIN) number for your Partnership, we are here to shed more light on that. The first step in quick form is to gather all mandatory business information. All of the detail on this we laid out in the paragraph above. From there, choose an application method that meets your needs, remembering online is the fastest and easiest. Work with a Tax ID service professional to execute the application and away you go.
5. Tax ID (EIN) Processing Times
What should be your expectations in terms of processing times to get your Tax iD (EIN) number? The application processing times will all vary based on how the form was submitted in the first place.
The online application form will usually take you less than one hour from the application start to when you have your Tax ID (EIN) number.
The fax form is second fastest, usually requiring around five to seven business days before you get the complete EIN back.
The mail form will require the longest as you may be waiting anywhere from four to six weeks before you get the EIN.
6. What is Business Need?
The business need for a Partnership Tax ID (EIN) number is pretty straightforward. As a Partnership, you will be conducting a variety of business practices. This could include something as basic as opening up a bank account in the name of the Partnership and even filing a tax return. To do these simple and required tasks, you will have to have an employer identification number. The same goes for any loans you may apply for, employees you hire, etc.
7. Conclusion
The Partnership needs a Tax ID (EIN) number to do a variety of normal business operations. On top of that, there is a need for the ID to file taxes and be in compliance with the Internal Revenue Service. Knowing all of this, put in the time early to get your Tax ID (EIN) number before you are in a situation where you cannot go forward as a Partnership without it.