Just as the need to file taxes is universal, all individuals and most
businesses are required to have identification numbers in order to file
those taxes. Known as an Employer Identification Number or EIN, a
taxpayer ID number is used to identify a business for tax purposes, and
is similar to a Social Security number.
However, not all businesses are required to have taxpayer ID numbers.
For example, sole proprietorships represent one type of business that
can go without obtaining one. But other formal and informal
organizations–such as homes with non-resident household employees,
owners of Keogh
even nonprofit organizations–do require a unique tax identification
Who is required to have a Taxpayer ID number?
You need to apply for a taxpayer ID number if you answer “Yes” to any of
the following questions:
* Do you have employees?
* Do you operate your business as a corporation or a partnership?
* Do you file any of these tax returns: Employment, Excise, or Alcohol,
Tobacco and Firearms?
* Do you withhold taxes on income, other than wages, paid to a
* Do you have a Keogh plan?
* Are you involved with any type of trust organizations, except certain
grantor-owned revocable trusts, IRAs, Exempt Organization Business
Income Tax Returns?
* Are you involved with any type of Estates?
* Are you involved with any type of Real Estate Mortgage Investment
* Are you involved with any type of Non-profit organization?
* Are you involved with any type of Farmers’ Cooperative?
* Are you involved as any type of a Plan Administrator?
How do I apply for a Taxpayer ID?
The IRS page How to Apply for an
identifies four means of applying for an EIN. Be aware that some
Internet businesses offer taxpayer ID or EINs for a small charge.
However, please note that these ID numbers are provided to applicants
free of charge by the IRS through a simple process.
The online taxpayer ID number
simple to complete and an EIN is issued during the session as soon as
the application information is validated. Online application is intended
for businesses or entities with principal operation or residence in the
U.S .or U.S territories. According to the IRS, the principal officer,
owner, trustor, general partner, grantor, etc. must have a valid
Taxpayer Identification Number (Social Security Number, Employer
Identification Number, or Individual Taxpayer Identification Number) to
be able to use the online application. (Special note: As of May 21,
2012, taxpayer ID numbers have been limited to one application per day
per responsible party through all application channels.)
Tax ID numbers can be obtained by calling the Business and Specialty Tax
Line at 800.829.4933, Monday through Friday, from 7 a.m. to 7 p.m. local
time. As with the online application, the EIN is issued during the
Taxpayers can fax completed Form
to the appropriate fax number of their state branch (see Where to File:
Business Forms and Filing
after making sure all of the required information is filled out in Form
SS-4. If the entity is determined to require a new EIN, one will be
assigned. If the taxpayer’s fax number is provided, a fax will be sent
back with the EIN within four business days.
If you’re sending your completed EIN application by mail, expect
processing to take about four weeks. Make sure the Form
SS-4 contains all
of the required information. To locate the mailing address for your Form
SS-4, go to Where to File Your Taxes for Form
Many of the new entities now required to obtain a taxpayer ID number
also will be required to file new forms specific to their functions.
Moreover, even businesses familiar with the EIN system will need to know
the requirements for when a new taxpayer ID number is required.
If you and your business need guidance on how to obtain a taxpayer ID
number, consider reaching out to a payroll and tax service. Paycor helps
businesses both large and small with everyday tax issues, from obtaining
a taxpayer ID number to helping business with quarterly and annual tax
filing. Contact us today for more