When Would I Need to Use an Employer Identification Number?

When Would I Need to Use an Employer Identification Number?
19 Sep 2018

An EIN or Employer Identification Number is used by the internal revenue services to identify your business for tax purposes. It is a nine-digit number set up like 12-3456789. So, it is similar to a social security number but can be distinguished.

Employer Identification Number

EIN numbers are required for any and all entities for the sole purpose of taxes and being able to confirm that you are a credible business. To obtain an employer identification number, you can visit the website IRS-EIN-Tax-ID. You would need to use and obtain an EIN number if you:

  • Recently started or own a business
  • Hired or will hire employees
  • Opened a bank account for business purposes that require a tax identification number
  • Changed the ownership of your business
  • Have or created a trust, pension plan, corporation, partnership, or LLC
  • Are an executor of an estate that operates a business after the owner’s death

In any of these instances, you would need to apply for an EIN number or use an EIN number. All business entities are required to use an EIN to identify the taxpayer. The different entities include:

  • Sole Proprietor/Individual
  • Limited Liability Company
  • Trust
  • Estate (deceased)
  • Partnership
  • Corporation, S-Corporation, Personal Service Corporation
  • Church-Controlled Organizations
  • Non-Profit

IRS-EIN-Tax-ID has broken down the process of applying for your tax identification number into three simple steps.

  1. Select entity
  2. Enter information
  3. Review and submit

For example, if you are applying for an estate EIN, you would input all the information needed for the estate EIN. Government agents will assist you during filing and processing. This assures that your information is correct, and your paperwork will process smoothly. It is crucial to input all the information correctly because if not, your application will be rejected, and you will have to do another.

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Mazhar Iqbal

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