Providing countless business benefits, the United States is considered a golden state for all the business owners. For this reason, we find many potential business owners asking what is my EIN number. Establishing a business in the United States is not very easy though, one has to go through a complex and complicated process to obtain an EIN number to register an organization.
In addition to this, those who are pondering over what is my EIN number, they need to reside in the United States particularly for its operations. To execute their business, first they need to obtain an E2 visa and then obtain any one of the tax ID numbers including SSN, ITIN or EIN. We will discuss each one of them in our blog. Any one of the tax ID number is a must for foreign principal investors to obtain as they help them with taxation payments.
If you are also interested in establishing a business in the United States and thinking what is my EIN number, you can find all the answers in this blog.
Overview to Tax ID Numbers
The Tax ID number is an identification number by the Internal Revenue Service for the individuals liable to report the taxes. These numbers are either issued by the IRS authority itself or by the Social Security Authority (SSA), based on the type of tax ID number. After obtaining the E2 visa, the next most important step is to apply for the specific tax ID number. They let you fulfill the tax obligations. If you really want to know what is my EIN number, you should first understand the basic to the tax ID numbers.
Generally there are five types of Tax ID numbers out of which only first three are active and permanent while the last two are temporary and are not issued by the IRS.
- Individual Taxpayer Identification Number (ITIN)
- Social Security Number (SSN)
- Employer Identification Number (EIN)
- Preparer Taxpayer Identification Number (PTIN)
- Taxpayer Identification Number for US Adoptions (ATIN)
Why Do You Need Tax ID Numbers?
While you are pondering over what is my EIN number, you must know why you need a Tax ID number. A Tax ID number is given to individuals on statements, returns, and tax related matters. Most commonly it is furnished upon people because of two common reasons.
- When individuals need to claim for their treaty benefits
- When individuals need to file for the tax returns
If an individual requires a Tax ID number because of any of the two mentioned obligations, then do need a Tax ID number. Before we go into the details and answer to the question what is my EIN number, let’s explore the three active Tax ID numbers in details.
1. Individual Taxpayer Identification Number (ITIN)
In order to properly figure out what is my EIN number, you must first understand what an ITIN number is. The Individual Taxpayer Identification Number (ITIN) is a nine digit number which is granted to the all the dependent individuals. They are those individuals who are either the family of the foreign investor or are somehow linked with them. The foreign investor may be working as an employee or as a business owner in the United States and thus they wish to reside in the United States and live with them.
In such a case, they would require having an ITIN number for their tax obligations. ITIN number does not make them eligible for working or start a business though, but they can just file their tax returns and enjoy the treaty benefits. ITIN numbers are also issued to those individuals who are not eligible for the Social Security Number. Those who wish to obtain this tax ID number; they can fill the W-7 form properly and get their ITIN number in hands.
2. Social Security Number (SSN)
Another Tax ID number which is most commonly issued to the individuals is the Social Security Number (SSN). These numbers are granted to the individuals by the Social Security Authority (SSA). There are nine digits in the SSNs. In addition to this, these numbers are only issued to those who are willing to work as an employee in the United States and have an E2 visa in hand.
Those who are pondering over what is my EIN number, they should know that the usually the permanent residents of the United State are given SSN numbers and temporary residents get it rarely. Individuals who want to obtain an SSN number, they just need to fill SS-5 form correctly. Once the United States Citizenship and Immigration Services (USCIS) find all the information genuine, they will grant them SSN number as soon as possible.
3. The Employer Identification Number (EIN)
If you are asking what is my EIN number, then you must first understand what an Employer Identification Number (EIN) is, to properly understand the answer to what is my EIN number. This is another form of Tax ID number. It is also known as Federal Tax ID number and has nine digits like Social Security Numbers and Individual Taxpayer Identity Numbers. This form of Tax ID number is required when an individual desires to start a business in the United States.
If you are asking what is my EIN number, then you must be interested in starting a business in the United States and not interested in employment specifically. It is issued by the Internal Revenue Service (IRS) for the business entities to file their tax returns. The corporations, partnership, sole proprietorship businesses and non-profit organizations etc are liable to have an EIN number for the taxes. If you wish to obtain an EIN number, you just need to fill Form 1041 and the IRS will grant you with the EIN number.
Do You Need an EIN Number?
If you want to learn the core of what is an EIN number, you first need to understand if you really require it or not.
No matter how small or big the business is, whether employees are working on part time basis or full time basis, all the corporations and companies require obtaining an Employer Identification Number (EIN). There are certain factors on the basis of which you can get to know whether or not you require an Employer Identification Number (EIN) for your business. If you answer in yes to any of following questions, you do need an Employer Identification Number.
- If you are paying your office employees up to $600 in a year.
- If you have developed and are directing a corporation, partnership, or a sole proprietorship business.
- If you need to file for the tobacco, alcohol, excise duty, firearms and employment.
- If you withhold taxes on income to aliens or non residents.
- If you have made a Keogh plan for your business.
- If you have made any of the following organizations
- Trusts which are not owned by grantors and are revocable, IRAs and Business Income Tax Returns
- Real estate Mortgage investment conduit
- Plan administrators
- Non-profit organization
- Farmer’s cooperatives
That being said, people pondering over what is my EIN number should also know that there are certain companies who do not require an EIN number. Nevertheless, an EIN number is very important for the corporations and companies but all form of businesses are not really eligible for it. The EIN number distinguishes your personal finances and financial data. If you are operating a sole proprietorship business with no employees at all, then you need not require an Employer Identification Number.
Types of Businesses and EIN Number
In this section, we will discuss which type of business needs an EIN number and some relevant information about them. Those concerned about what is my EIN number should also carefully read this section as one of the organization types could be their business type. So let’s get started.
1. Sole Proprietorship Business
This type of business is not incorporated and is a one man show as it is led by only one person. This is a very simple form of business organization. The owner is the only one who shares the profits and losses. Whether or not the owner uses the assets, they do undertake the risks of the whole business. Owners will need to report taxes and file returns by filling Form 1040.
Corporations are an incorporated and legal entities created under a state of group of persons, a single individual or shareholders. This business entity is considered separate from all other organization types. Being a separate entity, the corporations are liable for their own obligations, loans and debts therefore they need to fill Form 1120 to filing returns.
This form of business entity involves relationship of two or more persons who have promised to share profits and losses together for the trade and business. Partners are liable to sharing and contributing labor, skills, properties, money and gains and losses of the business. Those who are running a partnership business, they need to fill Form 1065 to filing returns and obligations of the taxes.
This form of business entity is formed because of a person’s death. The estate is a separate entity for the tax purposes. The estate is liable to pay taxes that were owned by the decedent. Until and unless the final distribution of the assets has been made to heirs, the estate exists. Estates need to file Form 706 for the tax returns.
5. Limited Liability Company (LLC)
The business entity which is formed by filing the articles or association or organization, is known as Limited Liability Company (LLC). The liability for the members of the company are limited therefore no one is personally liable to pay off the debts in case of bankruptcy. However, they need to fill Form 8832 for filing tax returns.
Pondering Over What is my EIN Number? You Need to Know the Application Process for the EIN Number
Now it is time to explore the answer to the question, what is my EIN number. If you are pondering over this question, you actually need to know the application procedure as you will only get to know that answer of what is my EIN number when you apply for it, at the first place. Before going into the details of the answer, you should keep in mind the following elements about the EIN number.
- Type of corporation structures such as C Corporation, S Corporation or Limited Liability Company
- The status of the individual
- The US founders of the business
- The association of your business with the United States’ attorneys or accountants
Ever since there have been modifications and amendments, the process of applying for the EIN number has become difficult. Therefore, if you want to know the core of what is my EIN number, you need to understand the following application process carefully.
- Step # 1: The companies or the corporations need to have a reliable and credible business lawyers who can represent as the third party designee for the business.
- Step # 2: In the second step, the lawyer will have to prepare the application for obtaining the Employer Identification Number (EIN).
- Step # 3: After the application has been prepared, the lawyer will contact the Internal Revenue Service (IRS) and will send the signed formed to the IRS authority.
- Step # 4: Once the application is accepted by the IRS, the business lawyer will receive the Employer Identification Number (EIN) there and then and will give it to you. As soon as you receive it, you will get to know the answer for the question you have been asking for, what is my EIN number.
Now that you know the answer for what is my EIN number, you should remember that the lawyer is playing a major role here. And, they must be chosen wisely and intelligently because they will be leading as the third party designee and responsible for the EIN number. So, you must ensure that they are credible, seasoned and professional.
Ways to Apply for the EIN Number
People concerned about what is my EIN number, must also be interested to know the ways to applying for the EIN number. Though, there are many ways, but you must always choose the one which is recommended by your lawyer and which suits them the best as they will be leading the process. Therefore their convenience must be seen at the first place for a smooth process. Let’s take a look at the ways below.
· You Can Apply Online
This form of application for the EIN number is free of cost and most commonly used by the individuals and attorneys. You can visit www.irs.gov and fill Form SS-4 online and apply for the EIN number. This would save time and money. Just make sure that the information you submit is genuine and correct. On the completion of online application, you will receive your EIN number immediately. So, now you need not worry about what is my EIN number, as you can quickly download and save it once you receive it from the IRS. The online application process is user friendly, fast, and very easy and highly recommended by the IRS itself.
· You Can Apply by Fax
After the online application process another most common way of applying for the EIN number is applying via fax. You can fill the Form SS-4 and fax it to 859-669-5760 if you live in any of the 50 states or District of Columbia or 859-669-5987 in case of no place of business and legal residence. You can fax the IRS at any time as they are open 24/7. Also, you must not forget to provide your fax number so that the IRS can get back to you and send the EIN number once the form is approved.
· You can Apply via Mail
Another traditional method of applying for the EIN number is mail but the only drawback is its long duration unlike fax and online application. You can receive your EIN number via mail in about 4 weeks. When submitting it via mail, you need to ensure and check the form properly. You can send the application form at the mentioned addresses. Always remember to check your address properly, because the IRS will send you the EIN number back at the same address.
Mailing Address for the 50 District of Columbia
You can apply at this mailing address if you live in the District of the Columbia or one of the 50 States.
Attn: EIN Operation
You can also apply on the following mailing address if you have no place of business, no legal residence, or principal office in any of the states.
Attn: EIN International Operation
Importance of EIN Number
Now that you know you the answer to what is my EIN number, we also want you to understand the importance of EIN numbers. There are several perks an individual can enjoy with the EIN numbers. Let’s have a look at them below.
- You will be able to file and report taxes using the EIN number.
- You will be able to open a bank account for your business.
- You will be able to apply for the local business license with the help of EIN number.
- Electronic filing will become easy for you.
- You can easily your income, state taxes, and other related taxes after obtaining your EIN number.
Mistakes to Avoid When Applying for the EIN Number
After completely understanding as to what is my EIN number, you should also know that people often make mistakes when applying for the EIN number. Therefore, we have come up with a few and common mistakes that you must avoid doing.
- Often people file Form SS-4 for obtaining EIN number even for the S-corporation. You should never file this Form. Instead, Form 2553 is suitable for you if you wish to elect to be taxed for the S corporation.
- Individuals often forget including SSN, ITIN, and EIN numbers. You must always include them on Line 7b of the Form SS-4.
- Not using legal names can put you in trouble; therefore you must always use full and legal names you entered on the Form SS-4 and on the EIN number.
- Not informing in case of changing address. You must always inform the IRS about the changed mailing address as you receive the EIN number. You can use Form 8822-B for changing the address.
Obtaining an EIN number is essential for business entities for a smooth process. Though the process is a bit complicated but you must not run away from your obligation and take step to obtaining it. We really hope you find this information interesting and it helped you in understanding what is my EIN number.