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Employer Tax Identification Numbers (“EIN” or “TIN”)
By Jennifer Reuting, author of Limited Liability Companies for Dummies™

For most, obtaining a tax identification number might sound ominous or at least will seem like a difficult or lengthy process. Luckily, this isn’t the case! Your® representative can in most cases get your EIN number to you the same day you order it!

What is a Tax Identification Number?

A Tax Identification Number (Tax ID), also called an Employer Identification Number (EIN), is a nine digit number in the format “12-3456789” that is issued to businesses by the Internal Revenue Service. Virtually every company operating in the United States from Microsoft to the Mom n’ Pop donut bakery on your corner has one of these numbers assigned to it.

What originally started out as a number that you would simply use to deposit your payroll taxes has become the de-facto equivalent of a social security number for an individual - only for businesses. In a time where numerous businesses can exist with the exact same name, Tax ID numbers serve the vital purpose of keeping them separate in the eyes of the government – and others!

Who Needs a Tax Identification Number?

Even if you are simply operating as a sole-proprietorship or general partnership, you will most likely need to obtain a Tax ID. For the most part, you need a Tax ID if:

Your business has employees or files any tax returns related to employment.

You withhold taxes on any sort of income (even independent contractor income).

If your business is operating as a Corporation, Limited-Liability Company, Series LLC or Limited Partnership.

If your business is involved with any of the following: trusts, IRAs, non-profits, REITs, estates, plan administrators or farmers’ cooperatives.

If you own multiple businesses and do not want your social security number listed on the application, you can list one of your existing businesses as the principal officer. You will need that company’s previous EIN (make sure the numbers match up, because the IRS will check).

When selecting the closing month of your accounting year, if you intend on closing your books out at the end of each year, you are operating on a calendar year and the closing month should be “December”.

Once you have received your EIN, make sure to write it down because you will definitely be needing it!
Who Else Uses My Tax Identification Number?

Not only does the federal government use your Tax ID to identify you, but your state and local government, your creditors, banks and possibly your vendors, might too. You will often need to have a Tax ID number before you can do such things as open a bank account, hire an employee, pay payroll taxes or even apply for a state business license!

When Can I Get a Tax Identification Number?

If you are operating as a sole-proprietorship or general partnership, you can apply for a Tax ID anytime. However if you are operating as a corporation or LLC, then you must wait until your articles of incorporation/formation have been approved in your state and you have received an official formation date from whatever state you’re forming your business entity in.

What Information Do I Need To Obtain a Tax Identification Number?

The application process is generally pretty simple, but you will need to obtain some information beforehand, such as:

Your complete business address.

The name of the principal officer, manager or owner.

If an LLC, the number of members.

The type of business and primary activities.

The date the business was started or acquired.

The closing month of your accounting year.

The number of employees you expect to hire in the next year.

A valid, previous EIN that the applicant has obtained, along with the date it was issued.

A telephone and fax number where the IRS can reach you.

Once you have this information in order, you are now ready to apply for a Tax ID. The IRS gives you plenty of options when filing your Tax ID. The most common one is to obtain and file the IRS form SS-4 (Application for Employer Identification Number) and mail it in, but this can take weeks. By far, the easiest and fastest way to obtain an EIN is to order it through® either when you order your corporation or LLC, or if your business entity is already formed,® can usually have your EIN to you on the same day you order it!

Is There Any Reason I Might Need to Change My Tax ID Number In The Future? And Can It Be Done?

In most cases, your Tax Identification Number will remain the same throughout the duration of your business. You will only need to obtain a new identification number under special circumstances.

If you own multiple corporations or LLCs, then you will need a different Tax ID for each entity. Also, if your company has subsidiaries, each subsidiary should have its own Tax ID. However, this is not the case for sole-proprietorships or general partnerships, only “incorporated” entities that you file with the state.

Keep in mind that you will not be required to file for a new tax identification number if:

You change the name of your business.

You change the location of your business.

The corporation or LLC declares bankruptcy.

Your LLC is legally terminated under IRC section 708(b)(1)(B) and a new one is automatically formed.

You are operating as a corporation and choose to be taxed as an s-corporation.

You operate under a sole-proprietorship and you file for personal bankruptcy, form a corporation or LLC or take on a partner (and thus become a partnership).

Your partnership (or LLC) is taken over by one of the partners and, since it is run by only one person, is therefore considered by the IRS to be a sole-proprietorship, or disregarded.

You purchase or inherit an existing business which you plan to operate as a sole-proprietorship.

Your corporation or partnership receives a new charter from the Secretary of State (you’ve created a new entity).

A corporation receives a new charter from the Secretary of State.

You are a subsidiary of an incorporated entity.

You change entity types, or become a sole-proprietorship or general partnership.
You can always obtain your EIN yourself, but we (of course) recommend that you just let us do the dirty work for you. No matter what your situation, if you need an EIN and need it quickly, the professionals at® are here to assist you. Tax identification number information.

- Jennifer Reuting

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