ein for an estate

How to Get a Tax ID Number for an Estate

Taxes are any economy’s backbone. They serve as the revenue that the government utilizes to better the life of its citizens by allotting it in places that will boost their welfare. Most of these taxes collected are used to improve the state’s infrastructure, health, public transit and education sectors as well as the lifestyle of its locals. Every big or small organization, either run by a sole proprietor or as a corporation, pays the government taxes like individuals do. Each organization or estate is allotted an EIN or tax ID number which is needed by them to file taxes at the end of every year.

If you need help getting an EIN number for an estate, please call us at 407-344-1012, or email us at info@freedomtaxfl.com.

When an owner running a business passes away, the process of handling his/her estate’s funds becomes an issue. If the owner had, in his will, appointed someone as an executor or administrator, they will be held responsible to paying the taxes if they decide to continue the business. In order to do so, the responsible party will need a separate tax identification number for the estate to file taxes. Also known as the Employer’s Identification number, it helps the Internal Revenue Service (IRS) identify the estate.

In this blog piece, we will learn about how to get a tax ID number for an estate. But what really is a tax ID number and how to get a tax ID number for an estate? Let’s take a closer look at that.

What Is An EIN Or Tax ID Number For An Estate?

To understand as to how to get a tax ID number for an estate, one must know what an EIN or Tax ID number really is.

In layman terms, it is a federal tax identification number that the IRS issues to all businesses and entities for them to file for and pay taxes. It is the same identification number that is issued to a deceased person’s estate.

Do You Need An EIN?

Before we learn about how to get a tax ID number for an estate, on May 21st 2012, the IRS decided to limit an EIN issuance to one responsible party per day to ensure that all taxpayers are fairly and equitably treated. This limitation holds true for all taxpayers whether they applying for an EIN issuance online, through mail, or via fax. The IRS also apologized for any inconvenience this decision may have caused a taxpayer.

So, how to know if you are eligible for an EIN number? Here are the conditions. If you find yourself in approval to any of these points, you are eligible to attain an EIN.

  • You have working staff/employees (Yes/No)
  • Your business operates as a partnership or cooperation (Yes/No)
  • You have a Keogh plan (Yes/No)
  • You file any of these tax returns: Excise, Employment, Alcohol, Firearms and Tobacco (Yes/No)
  • You withhold taxes on certain income, apart from wages paid to a non-resident (Yes/No)
  • Your mode of business involved in any of these following types of organizations (Yes/No)
  • Trusts, excluding a few grantor-owned revocable trusts, Exempt Organization Business Income Tax Returns, and IRAs
  • Estates
  • Non-profit organizations
  • Real estate mortgage investment conduits
  • Plan administrators
  • Farmers’ cooperatives

Do You Need A New EIN Number?

Many taxpayers rush to look for the answer regarding how to get a tax ID number for an estate without realizing if they need one in the first place.

Most of the times, a new EIN number is required if the structure or ownership of the estate has been changed. This doesn’t include changing the name of an estate as you don’t require a new EIN for that. It can easily be done by visiting the Business Name Change and following the instructions on that page. So, when would your business require a new EIN number? There are two conditions to determine if you need a new EIN or not.

  1. A new trust is being created using the funds from the estate (not merely a continuation but a separate trust).
  2. You are the representative of an estate and wish to continue after the owner’s death.

If you answered yes to any of these two statements, you will need a new EIN.

However, you will not need a new EIN if the executor, personal representative, or the administrator changed his/her address or name.

If you need help getting an EIN number for an estate, please call us at 407-344-1012, or email us at info@freedomtaxfl.com.

How to Get A Tax ID Number For An Estate: Complete IRS Form SS-4

In order to apply for a tax ID number, the administrator or executor needs to fill out IRS’ SS-4 form which can be collected from a local IRS field agency or can be printed out from their official website. Under this heading, we shall teach you how to fill out an SS-4 form for an estate for all those who are looking for the answer to the question, ”How to get a tax id number of an estate?”

  1. Carefully go through all the instructions on the form after you have obtained it. You will need to fill out the SS-4 form which will later be used to complete the income tax returns form 1041 for the estate. Be sure to thoroughly read and understand all the instructions as they may not be understood at the first glance.
  2. Fill in all the information from Lines 1-6. These sections will serve to identify the estate. Here’s how you fill it;

 

  • In Line 1, enter the first, middle-initial, and the last name of the deceased followed by the word “Estate.”
  • In Line 2, enter “N/A”.
  • In Line 3, write the name of the administrator, executor, or any other fiduciary applicable.
  • In Lines 4a–b, include the estate’s mailing address. When sending any correspondence, the IRS will use this address.
  • If the administrator or executor has a different address from that of the state, mention it in Lines 5a-b.
  • In Line 6, write the name of the county and state where the will is validated.

 

  1. Fill in “N/A” in Lines 7a–b and 8a–c. The reason to mark these sections as N/A is because only a few companies need to complete these sections and since you are filling out the form on behalf of an estate, it doesn’t apply to you.
  2. In Line 9a, tick the box for “Estate”. This will make the overall purpose of filling out the form clear (i.e. to attain a tax ID number of an estate). In the space provided, you will be asked to put in the Social Security Number of the deceased. In Line 9b, write ‘N/A’. This is only filled by corporations and thereof, it doesn’t apply to you.
  3. In Line 10, tick the box for “Other”. This section determines the reason you are applying for an EIN. In the space below, you will be asked to specify the reason. Write “Estate Administration”.
  4. Fill in Lines 11 and 12. These two lines relate to the dates that will be used to determine the estate’s tax liability. In Line 11, write the date of when the estate was funded (usually the date of the death of the owner) and in line 12, write the last month of your tax year/accounting.
  5. Fill in Lines 13-15. This is regarding the information of any employee working for the estate. For instance, if the estate hired cooks, gardeners or maids, you will have to fill out these sections appropriately. Most estates don’t have employees. So, if such is the case, simply write “0” in line 13 and “N/A” in both Lines 14 and 15.
  6. Fill in the Lines 16-18. The information you provide in these sections again serves to identify that you are the person who is filling out a form on behalf of an estate. This is what you need to fill in those lines:
  • In Line 16, tick the box for “Finance & Insurance.”
  • In Line 17, write “Estate Administration.”

In case the deceased had applied for and was issued an EIN in the past, tick the box ‘Yes’ and write the previous EIN number in the space provided. If such is not the case, tick ‘No’ and in the space next to it, write N/A.

  1. If applicable, complete the ‘Third-party Designee’ section too. But before you do so, you should know that if you fill out this section, you will be held responsible for any questioning regarding the authority of the person who receives the new Employee Identification Number and will have to be answerable to any questions arising regarding the EIN number obtained later. If you don’t wish to be that person, it is best to write N/A here. For instance, if you are filling out the form but want your attorney to be the receiver of the EIN number, you will have to put down his name and details in this section.
  2. Next, you will be required to sign your form and in the space below, or on the right, also mention the date. Also ensure you print your name, telephone/fax number, and the title in all the spaces provided
  3. In case there is a third-party designee, have him/her sign the form too. If you have filled out the details of the third-party designee, make sure that you and the third party both have signed the form.
  4. Once you have filled out all the information, keep a copy of the form for your own records. Please know that this is an important legal document and therefore, a copy of it must always be with you for referencing to it later. Since it contains personal and sensitive information about yourself and the deceased, it is also advised to have it placed in a secure location.

How to Get a Tax ID Number for an Estate?

When looking for an answer as to how to get a tax ID number for an estate, there are four different ways to attain one. But before we disclose those four ways of how to get a tax ID number for an estate, there is something crucial you must know. In order to apply for an EIN or tax ID number for an estate, you either need to be an administrator or executor of the decedent’s estate who has been appointed as one by the decedent himself in his/her will, or has been assigned one as per the court orders to apply for one in his/her behalf. When filling the application, you will be asked to mention the decedent’s personal information to complete the process.

Moving on to the four ways to answer the question as to how to get a tax ID number for an estate, they are:

How to Get a Tax ID Number for An Estate: Apply by Fax

A taxpayer can also apply for an EIN or tax ID number for an estate via fax. The procedure involves faxing the SS-4 form including all the requisite details about yourself and the decedent’s personal information to filling fax number according to your state. Upon determination, if the IRS finds the application form satisfactory (i.e. has provided the correct information), an EIN will be assigned to the entity by either mailing it to his/her given address or faxed back if a fax number has been given within 4 business days. The taxpayer can use the EIN right away.

How to get a Tax ID Number for an Estate: Apply by Mail

Another way to apply for a tax ID number for an estate is by mail. If you asked about how to get a tax ID number for an estate by mail, here is how you can do so:

  • From your local IRS field agency, obtain an IRS SS-4 form or have it downloaded and printed from the IRS’ official website. If you wish to have the EIN number directly mailed to your address, contact the IRS Tax Form Request line on their toll-free number (800) 829-3676.
  • Fill complete information in Lines 1, 2, 3, 4, 5, 6, 7a, 9a, 10, 11, 12, and 18. Leave all the remaining spaces on the SS-4 form blank.
  • Enter your full name under the responsible party on line 7a.
  • Tick the box for estate on line 9a. In the box next to it, enter the decedent’s Social Security Number.
  • Enter your full name again as the third-party designee and in the boxes next of it, fill in your complete address and your telephone number.
  • At the bottom of the SS-4 form, print your name on the appropriate line and place your signature underneath your name on the line. In the same space, next to your signature or below it, enter your telephone number.
  • Once the form is completed, have it photocopied or printed and retain one copy for the estate’s record and mail the other (original copy) to the IRS office. Your EIN will be delivered to your address via mail once the IRS finds all the information listed satisfactorily. Note: it may take up to 4 weeks before you receive your new EIN number for the estate.

How to get a tax ID number for an estate: Apply by Telephone

An executor or administrator can also apply for an EIN via telephone.

  • To do so, he/she must call the IRS Business & Specialty Tax Help Line at (800) 829-4933 and request to complete an EIN application.
  • Upon request, you will be attended by an IRS representative over the phone who will ask for your details, including your and the decedent’s information in a live interview-style conversation.
  • After you have completed all the requisites of the application, the IRS representative will give you a tax ID number for your estate.
  • That is all; you can begin using your tax ID number for an estate right away.

How to get a tax ID number for an estate: Apply Online

The last method to answer the “How to Get a Tax ID Number for an Estate?” question, you can do so by applying for an EIN online. Presented below are steps to apply for it online.

  • Start by visiting the IRS website and look for the EIN application. Once on the page, you will be presented with different options. Click on the ‘Apply for a New EIN’ to start filling your application. When applying for an ‘estate EIN’, click estate from the list and confirm this selection on the next screen that appears.
  • Once on the next screen, enter your full name and SSN or individual tax ID number of the deceased person. Make sure to recheck all the information for spelling errors before clicking ‘Next’.
  • Next, enter the date of the deceased’s death or the date on which the estate became legally funded. Hit ‘Next’.
  • The next page will require you to put down the estate’s address. You can choose no legal address in case the estate has no current address.
  • On the next screen, enter your full name as the third part designee along with your phone number in the next line.
  • You will be asked to enter your full name twice on the next screen under the ‘Applicant’ line and also for the electronic signature.
  • Now, your online application is complete. To review all the information, hit ‘Submit’. Upon reviewing, if you come across any mistakes that need to be addressed, choose ‘Edit’ and make the necessary changes. Once satisfied with the application, print the page and click ‘Submit’ again. Keep the information saved on your end. As soon as you submit the application, you will receive your Estate EIN number immediately after.

So, now that you know of the four ways on how to get a tax ID number for an estate, we hope that this process will be a breeze for you.

If you need help getting an EIN number for an estate, please call us at 407-344-1012, or email us at info@freedomtaxfl.com.

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