EIN

EIN What Is The EIN and What Is Its Purpose?

The EIN, or the Employer Identification Number, is an identifying number, which is assigned by the Internal Revenue Service. The EIN is also one of the Federal Tax Identification Numbers and is utilized to help identify an individual business or corporation. Businesses are typically required to obtain one of these figures, while self-employed individuals can do so on their own accord. The sole purpose of the EIN is for tax administration and the number should not be used for other reasons, such as lotteries or tax lien auctions.

What Should I Do If My Business Has Previously Obtained an EIN Online?

Unfortunately, your business will not be able to obtain another EIN online if one has been obtained online previously. Instead, you will need to fax or mail in the SS-4 form.

Should I Obtain An EIN? The majority of businesses will be required to obtain an EIN. Others will feel an obligation to obtain one.

Below, you will find a number of reasons for acquiring an EIN.        

You have hired employees Your business could be classified, as a corporation or partnership You are required to file Employment, Alcohol, Tobacco and Firearms or Excise tax returns You are responsible for withholding taxes on income, besides wages, paid to non-residential aliens You have a Keogh plan You are currently responsible for a non-profit organization or Farmer’s cooperative You are involved with trusts, IRAs, estates or Exempt Organization Business Income Tax Returns You work as a real estate mortgage investment conduit

Will I Need To Obtain A New Tax ID? The majority of organizations and businesses will never need to obtain a new EIN, once they have obtained an original. However, there are some situations which will warrant a change. For instance, if your company’s ownership or structure has been altered, you will need a new EIN. Below, you will discover a list of reasons for making the change, depending on the classification of your business.

Sole Proprietors    

You are forced to file for bankruptcy You have decided to incorporate your business You have inherited or purchased an existing business and decide to operate it as a sole proprietor You intend to operate the business as a partnership

Partnerships   

You have decided to incorporate the business An existing partnership has been ended and a new one has begun The partnership has been taken over by a partner and will now be run as a sole proprietorship

Corporations    

A new charter has been received from your secretary of state You have decided to transform the business into a sole proprietorship or partnership A statutory merger has resulted in a new corporation As a subsidiary, you can use the parent company’s EIN or you can decide to obtain your own

Estates  

You have been representing an estate and operate a business after the owner has passed A brand new trust has been originated using funds from an estate

Limited Liability Company (LLC)  

You’ve started a new LLC, which has more than one owner A brand new Limited Liability Company, which has a single owner, has been formed in accordance with state laws

Trusts   

A single individual is responsible for many trusts A trust is in the process of being changed into an estate You need to change the type of trust you manage

What Is Different Between An EIN and A Tax ID Number?

Both are the same. There is a small collection of different Tax ID Numbers and the Employer Identification Number happens to be one of them.