All You Need to Know About the Employer Identification Number

The days of business planning, incorporation and start-up pains are over. Everything is set for you to start off your new business. Just when you think all the paperwork is done, the Employer Identification Number stares you in the face. What is it? Well, you know that any business entity is required to file tax returns every year. Will your Social Security number suffice for that? Not quite. Unless you are the only person working in the business, you need to get an identification number for your enterprise. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States for the purposes of identification. When the number is used only for identification, it is usually referred to as Tax Identification Number (TIN) and when used for the purposes of reporting employment taxes, it is known as Employer Identification Number (EIN).

So, it’s clear that all new businesses need to obtain an EIN. The only exception is for sole proprietorships which do not have any other employees. However, it is a good idea even for sole proprietors to obtain an EIN, so that they can use it instead of their personal Social Security number on bank accounts and legal paperwork.

Confused? We’ll make it easier for you. You need an EIN:

1. When you have employees in your company
2. When you purchase an ongoing business
3. When you change your organization type - for example from a sole proprietorship to partnership or corporation
4. When want to hold different accounts in your bank and use EINs for your business and Social Security number for your personal accounts
5. When you have a qualified retirement plan
6. When you file any of these tax returns:
o employment
o excise
o alcohol, tobacco and firearms

The EIN is specific to a particular business and you cannot transfer it if you sell or otherwise divest your company. It is very much like your Social Security number which is specific to each individual, and is usually written in the form 00-0000000.

To obtain an EIN for your company, you have to file Form SS-4, which is the prescribed application format, with the Internal Revenue Service (IRS). The forms are available at all IRS and Social Security offices. You can apply for it over phone, fax, mail or online. There is no application fee but the form can take several weeks to process depending on how you ask for it. You may also have to apply for a state EIN in states that charge their own income tax.

If you do not have your EIN by the time a return is due, write "Applied for" and the date of the application in the space shown for the number. Do not use your social security number in place of your EIN.

With that out of the way, you are truly set to be in business!

Hi, I'm Akhil Shahani, a serial entrepreneur who wants to help you succeed. If you like to work smart, check out http://www.SmartEntrepreneur.net . It's full of articles and resources to help you start and grow your business successfully. Please visit us & download our special "Freebie of The Month" at
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Article Source: ArticlesBase.com - All You Need to Know About the Employer Identification Number

In NY city many need an employer identifcation number application

Employer Id Numbers- Ein or Fein

There are so many people in the U.S. today that they aren’t easily identified by names. Therefore, they have been assigned numbers by the government, known as Social Security Numbers. This number is how people are identified in many transactions, including taxes, health insurance, banking, and many others.

Businesses are identified similarly to people, but instead of Social Security Numbers they have what is known as an EIN, or Employer Identification Number . This number is unique to each different business, much like the social security number, but it follows a 00-0000000 format instead of the 000-00-0000 format of social security numbers. They were designed this way so that the computers can distinguish the difference between individuals and businesses based on whether they have an EIN or a SSN.

If you are planning on starting a business, or already have a business, you might need an EIN for your company. There are four reasons business are required to have EINs, as listed below:

1.You have employees
2.If you offer a retirement plan or 401(k) (even if you are the only employee of your business)
3.The business is required to pay taxes on alcohol, tobacco, and/or firearms
4.Your business is a corporation or partnership

Having your own business as a sole proprietorship doesn’t require the use of an EIN, but it can be useful. If, for example, you need business loans or lines of credit, some banks will require you to have a valid EIN before you can borrow money. Although it might not be a necessity, getting an EIN is a great way to separate your business from your personal entities and make it a more formal business.

There are three ways to obtain an EIN, once you’ve decided that you need one. You can fill out and mail a SS-4 form from the IRS, which you can find on their website or at your local library. This might take a little more time because of the mail services and the paperwork involved. For a faster transaction, you can call 800-829-4933, which is the RS Business and Specialty Tax line. However, if you want instant results, consider using the internet EIN application at http://www.irs.gov, and you can have an EIN in a matter of minutes.

No matter how you obtain an EIN, it will take some time to go into effect. It could be up to two weeks before the number shows up on your tax records for your business, and until then you can’t perform any transactions that require the use of that EIN.

United Business Credit can help you build up to $250,000 in Business Credit without any personal credit or guarantees. We can also help you get unsecured Business Credit cards and Business line of credit. Give us a call today.

Article Source: ArticlesBase.com - Employer Id Numbers- Ein or Fein