If you’re ready to start your new business, then you have to be sure that all of your paperwork is in order. While you may be familiar with things like business licenses and permits, the first step should be securing an employer ID number (EIN). Today, we’re going to show you how to get a federal tax ID and how to apply for EIN online.
Why Do I Need a Federal Tax ID?
As a business, you have to pay taxes on your earnings. However, to do that, you have to create a unique entity. If you are forming a sole proprietorship, you can use your social security number (SSN) instead of an EIN, but any other kind of company needs an EIN.
Also, if you are planning on doing any of the following things, you will have to have an EIN to make it happen:
- Hire Employees
- Have a Keogh Retirement Plan
- File Taxes for Alcohol, Tobacco, and Firearms
- File Excise Taxes
- Open a Business Bank Account
Fortunately, the process for getting one is relatively simple.
How to Apply for EIN
Once you have all of your business details gathered (name, address, etc.), then you can file for an EIN online using the IRS application. To make things easier for you, it can be best to utilize a third-party filing service to get it done.
What’s best about this is that it only takes about a day to get your EIN and start using it. That being said, you should also know that the IRS takes a few weeks to update their database, so you can’t file your taxes immediately.
You can find the EIN application form here to get started.
Getting your employer ID number is a fundamental step towards getting your new company off the ground, so be sure that you take care of this process as quickly as possible.