Are EIN Forms Necessary When Starting A Business?
15 Feb 2018
Starting A Business
There are a lot of forms that you will need to complete before starting a business. Among these is the Employer Identification Number Form, also called the EIN form or Form SS-40. Here is more about the necessities of an EIN form when filing for a business and how to go about submitting this important document:
What is an EIN?:
An EIN essentially acts as your company’s social security number for tax purposes. Once you receive your EIN, you will use that number every year to file taxes for your company. Like a social security number, your company’s EIN will remain attached to your company and will continue to be associated with the company even if you decide to close your proverbial doors. However, if you change the entity of your company by for instance going from a sole proprietorship to a partnership, you will need a new EIN.
Other EIN Uses:
In addition to using your EIN number for tax purposes, you can also use that number to open a line of credit and for other financial purposes. In some cases, using an EIN can help establish credibility- especially for newer or smaller businesses.
Obtaining an EIN:
The easiest way to obtain an EIN is by filling out an online EIN application with a trusted website. The turnaround time for an online applications is typically one to two days assuming that there are no major issues. You can also submit the EIN form by fax or mail. However, this method is much more time-consuming and it can take up to a month for you to receive your EIN number.
While obtaining an EIN is important, the process can be simple. Keep in mind that you can use your EIN immediately after you receive the number. However, you’ll need to wait for your EIN to be processed for tax purposes so it is important to file for your EIN well before tax season.
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