EIN is essential after registering your Delaware LLC or Corporation. The next step involves applying for and receiving it. To set your business up for
success, filing any necessary paperwork is important. In most cases, applying for the number should be a top priority during the beginning stages of your business in the United States.
What Is an Employer’s Identification Number?
The Employer Identification Number also known as the Federal Employer Identification Number (FEIN) or the Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities registered in the United States for the purposes of identification.
Recommended reading: Delaware business registration
All businesses that meet certain criteria must have an EIN before they can begin operating. EINs are issued by the IRS and include information about the state in which the corporation is registered. The agency uses the numbers to identify taxpayers required to file various business tax returns.
8 Reasons Why You Need an EIN
1. To operate as a separate legal entity. While sole proprietors can use their Social Security Number (SSN), other forms of business must apply for an EIN. These
include corporations, LLCs, trusts, and more which are separate legal entities
from one personally.
2. It protects your Social Security Number (SSN) from being shared and reduces the potential for identity theft.
3. It is required to open a business bank account for most forms of business in the United States.
4. It is required to apply for credit or loan in the name of the business.
5. The government requires businesses to have an EIN if they hire an employee or withhold taxes on income paid to a non-resident alien.
6.It is required to apply for business licenses and permits.
7. It is required to purchase or inherit a business.
8. It is required to file taxes for your business. EIN is used for Federal and state payroll tax reports and payments.
How to Apply for an EIN for Your Business
There are 3 different ways through which you can process your EIN application. To
apply for an EIN, you can fax or mail Form SS-4 to the IRS or apply online. It’s much
faster online. The processing time for EIN depends on how you apply, so it’s important
to apply accordingly.
1. Online: Applicants must complete their form SS-4 in one online session You will receive an EIN immediately upon submission. To apply online, click on the EIN online application page.
2. Mail: The IRS also accepts paper SS-4 applications by mail, and these take approximately four or five weeks to process.
3. Fax: Alternatively, there is the option to also fax your Form SS4 to the IRS.
Some of the information that must be included on the form includes:
● The type of entity ( sole proprietor, partnership, corporation, LLC, estate, trust, or
another type of entity)
● The reasons for applying (new business, change of organization, IRS withholding
● Business location. Share the address of the business (and mailing address, if
needed). A business must be located in the U.S. or U.S. territories to apply for an
● Business information. Provide the name of your business, which countycountRy,
and state it’s located and when and where it was formed.
● The start or acquisition date of the business.
● Financial calendar year of the business.
Once the above information is validated, an EIN is assigned immediately.
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