Tax ID numbers for business are similar to social security numbers for citizens. A tax ID number is often referred to as an Employer Identification Number (EIN). Most businesses need them in order to fulfill their tax obligations legally. The Internal Revenue Service (IRS) uses these ID numbers to identify and track companies’ tax obligations. If you are wondering how do you get a tax ID number for a business, read this post.
Decide If You Need An EIN
Before you begin the application process for a tax ID number, decide if you need one in the first place. Consider studying business law to gain a better understanding of your tax requirements as a business owner. While most businesses require EINs, some entities do not need them to comply with IRS rules. A good rule of thumb to follow when determining whether you need one or not is to look at your business structure. Companies registered as corporations and partnerships need tax ID numbers. Similarly, businesses that employ workers need to obtain tax identification numbers as well. Use these guidelines to decide if you need an EIN. If you discover that you do need one, continue learning how do you get a tax ID number.
Determine If You Are Eligible
Once you decide that you need an EIN, determine if you are eligible. The Internal Revenue Service’s main requirement is that you operate your business in the United States or U.S. Territories. In addition to this qualification, the IRS also demands that you have a Taxpayer Identification Number yourself. This number is often referred to as Social Security Number (SSN) and Individual Taxpayer Identification Number (ITIN). Ensure that you meet these qualifications before continuing to get a tax ID number for your business.
Choose An Application Method
Next, choose an application method for receiving your tax ID number. The two most common methods include applying online and filing the IRS EIN application form. Most new business owners opt for applying online because it offers a faster process. If you choose this method, you can spend time marketing a book for your new bookstore. Restaurant owners, clothing store owners and even construction companies gain more time to advertise their brands as well. Simply visit the IRS website and fill out the application right on your laptop. Although this is the faster route to take, some business owners still prefer to get their tax ID numbers the old fashion way. To apply through the mail, fill out Form SS-4, Application for Employer Identification Number and follow the guidelines for mailing it to the IRS. Choose between these application methods to get a tax ID number for your business.
Review Application Rules
Another important step to take when learning how do you get a tax ID number for a business is to review application rules. When business owners fail to review the guidelines listed on the application, they fail to complete them properly. Save yourself time by reading the rules and filling out the forms properly the first time around. One of the main rules that business owners miss is that the online application can only be completed in one session. Avoid wasting your time by reviewing application rules to get a tax ID number.
Complete The IRS Application
Finally, complete the IRS application using the method of your choice. Once you do, you can even start thinking about how to franchise my business because your tax obligations will be in order. The application requires you to input specific information. For instance, you need to provide the type of entity your business is registered as. Include basic personal information and your business address as well. If you own multiple offices or brick-and-mortar locations, you need to write all of their addresses down. Prepare this information prior to starting your EIN application. Then, you can successfully obtain a tax ID number for your business.
Similar to how citizens need social security numbers, most businesses need tax identification numbers. To obtain one for your business, first decide if you need one. Then, determine if you are eligible by familiarizing yourself with the qualifications. If you are eligible, choose between applying online or through the mail. Review application rules regardless of the method you choose to use. Lastly, gather all necessary information and complete the IRS application. Take these steps to learn how do you get a tax ID number for a business.