A Tax ID Number is a need for the vast majority of business entities, such as a Tax ID for a Trust or an LLC Tax ID number. It is a number that will allow you to identify your company and all its operations with the Internal Revenue Service (IRS). The Federal EIN Number is all about the tracking of your tax obligations, whether it is complying with taxes you owe, completing tax reporting forms for employees, etc. Since it is a requirement, it is also important that you know how to apply for one, the preparation you have to take, etc.
Steps to Apply for a Tax ID or EIN Number Online
- Prepare Required Information
- Name a Responsible Party
- Apply for your Tax ID Number Online
- Apply for your Tax ID Number via Phone, Fax or Mail
- What is a Tax Identification (Tax ID) Number?
- Why do I need a Tax ID (EIN) Number?
Step one of any Internal Revenue Service filing process is the preparation of information. You do not want to hop on the Internal Revenue Service website and start to fill out an application for a Tax ID Number without having all the answers or making an educated guess.
Take the time to prepare all your information from top to bottom. Figure out where your business is going to have a principal location, who is going to be the leader of the business, responsible party, and so on. You need to take time to get your ducks in a row basically before you feed any false or inaccurate information to the Internal Revenue Service. Gather up the information you need and then move forward for an accurate and seamless application process.
The first piece of information you need to get a Tax ID Number is you need the responsible party information. Every business needs to designate one person to be the responsible party with the Internal Revenue Service. This responsible party will be the individual that fills out the form to apply for the Tax ID Number in the first place and put their name on the form to align with the organization.
The responsible party is an individual with control over the funds or assets of the entity. They have entitlement to them. In the event the assets and funds need disposition, this would be the person that would take on that move. To qualify as a responsible party, you need to be an individual with an SSN, EIN, or ITIN of your own.
The easiest way to obtain a Tax ID Number is to go through the online application process. You can apply online quite easily and in a quick fashion when you know the process. The Internal Revenue Service took the forms they require and put them in an electronic format. The idea is you can complete the online form in a matter of minutes and submit it all to the Internal Revenue Service with ease. Guides exist online to help you through the process, but it is definitely the best way to go.
The great thing about the Tax ID Number online application process is how quick you get a response. After you fill out the form you can submit it right online and you will end up with validation of that data in minutes. Once the Internal Revenue Service does its data validation, it will fire back at you your actual Employer Identification Number.
You also have the ability to apply for a Tax ID Number over the phone, using snail mail, or via a fax machine. The phone method is the most unique of this bunch and will need you to spend some lengthy time talking to the Internal Revenue Service and trying to fill out the form by answering a series of questions. It will take some waiting at the end with your EIN print right on it.
For the mail and fax methods, these work well but they will also require you to have some patience. With these methods, you are filling out the forms in full and then sending them off to the IRS via mail or fax. You will wait several business days to weeks for a response, but you will end up with the EIN in the end.
A Tax ID Number is an identifier that allows the Internal Revenue Service to know who you are as an organization, track your revenues and tax reporting needs, and ensure compliance. You do a lot of business as an organization and in the end, the Internal Revenue Service needs to be able to track that. The unique identifier is what allows your business and its operations to be traceable by the Internal Revenue Service for tax administration.
You do need to start by figuring out if you need a Tax ID Number in the first place. The answer is most likely yes, but there are a couple of exceptions to the rule. For one, if you are a sole proprietorship or an LLC that has no employees, you do not need a separate Tax ID Number. In these two cases, you can use your own personal Social Security Number to identify yourself rather than getting a different identifier. Outside of those two situations though, you need a Tax ID Number. Even a partnership that has no employees requires its own Tax ID Number. This will hold true for an Estate, Corporation, S-Corporation, Non-Profit, and so on.
You now know you need a Tax ID Number. You understand the purpose of the number as well. It is now a matter of making the move to actually apply for, and get the required identifier. It is easier thank you think to obtain a Tax ID Number, but it is all a matter of acting on it in a timely fashion. You have the ability to apply right online for it, making it no excuse on why you do not get one. Taking that into account, make the move and get your Tax ID Number as soon as possible. Comply with the Internal Revenue Service, get it out of the way, so you can focus on growing your business and making it profitable.