If you are starting a business or dealing with some changes to an existing company that affect your tax filing status, you need to know how to obtain an EIN.
An EIN is an “Employer ID Number” that's the federal tax identification number for your business — similar to a Social Security Number, but for a company. One of the services that Incfile provides to our customers is helping them get EIN numbers quickly and efficiently. There are a few options to obtain EINs for small businesses, and working with Incfile’s paid service to obtain an EIN can potentially help you get your EIN within 1 business day.
Here is some more information about how Incfile works behind the scenes to help you obtain an EIN for your business.
What Is an EIN?
An EIN is an Employer ID Number. It is a unique number assigned to a company that serves as an identifier of the business for tax purposes. The EIN works similarly to a Social Security Number, but for businesses instead of for individual people.
Why Do You Need an EIN?
You need an EIN in order to open a business bank account, get a business credit card (or business line of credit) and file a corporate tax return. Having an EIN helps your business become “official” as a legitimate corporate entity that is separate from your personal finances.
Your Employer ID Number is necessary for various circumstances of doing business, such as:
Withholding payroll taxes for employees
Buying inventory for resale
Operating as a corporation or partnership
...and many other fundamental situations where you need to identify your business for tax purposes
Having an EIN is one of the most important first steps to take when forming an LLC or other corporate entity. But even if you've already incorporated your business and gotten your EIN, there are some other situations where you might need to get a new EIN:
If your business is purchased by a different individual who creates a new sole proprietorship
If your business structure (sole proprietorship, LLC, corporation or partnership) changes from one structure to another
If a company owner dies and the owner’s estate takes over the business.
How Does Incfile Help Get EIN Numbers?
Incfile offers a special service to obtain EINs for business owners. This EIN service is included for free as part of our Gold and Platinum business formation packages; if you go with one of these packages to have Incfile help you start your business, you can get your EIN at no extra charge.
Can Business Owners Obtain EINs by Themselves, Without Paying for Incfile’s Help?
Yes. Business owners are not required to hire a service to get EINs. It is possible to file the necessary forms by yourself. However, Incfile offers our EIN service as a value-added bonus on our Gold and Platinum packages, and our EIN obtainment service is helpful if you want to save time and make sure your business gets your EIN as quickly and efficiently as possible.
How Does Incfile Work Behind the Scenes to Obtain EINs?
Incfile gives business owners a simple online form to compile the necessary details about their business, which will include the following:
Name and Social Security Number of the principal owner
Number of owners of the business
Number of wage-withholding employees of the business
Principal activities of the business
Incfile then submits this information to the IRS, and ensures that the relevant information is submitted in compliance with IRS requirements. This service provides an extra set of eyes to review the business details and correct mistakes if needed.
Working with Incfile’s EIN service can often help you get your EIN faster than you might have been able to accomplish on your own (within 1 business day).
What Special Situations Make It More Complex to Obtain EINs?
If you are not a U.S. citizen, it might be more complicated for you to get an EIN for your business. There are special procedures for business owners who are non-U.S. citizens or foreign residents. You might not be able to apply for your EIN online; you might have to apply by phone (during designated hours) or by mail (which can take several weeks). You also might want to set up a Third Party Designee who is authorized to deal with the IRS on your behalf – this can be done as part of filling out your IRS Form SS-4.
Ultimately, getting your EIN is just like the other aspects of forming an LLC or starting a business with Incfile: it often helps to have a trusted, experienced professional service provider that can help you navigate the process and file your forms correctly and on time. Especially if you need an EIN on short notice, it might be worth paying for the added convenience and peace of mind that comes from getting your EIN forms completed and receiving your new tax ID as quickly as possible.
Ben Gran is a freelance writer from Des Moines, Iowa. Ben has written for Fortune 500 companies, the Governor of Iowa (who now serves as U.S. Secretary of Agriculture), the U.S. Secretary of the Navy, and many corporate clients. He writes about entrepreneurship, technology, food and other areas of great personal interest.