How to Get an EIN for Your Small Business
An Employer Identification Number (EIN) is a nine-digit uniquely assigned number for your business so that the Internal Revenue Service (IRS) could easily identify it. Beyond that, it is mainly used by business employers to report taxes.
Hence, an EIN is essential for you to hire employees as they will be needing it. Apart from that, if your business is in the sole proprietorship structure, you might not be required to acquire one although you could also use it for tax purposes. As an analogy, this type of ID number is sometimes compared to social security number (SSN) for its purpose of identifying an individual. If you are confused about how to get an EIN for your small business, you are on the right track. Dive in and be guided:
Know the online application first
Many entrepreneurs prefer the online application as it is faster and easier to do. For this method, you may visit the IRS website and complete the application for EIN. Make sure that you all get prepared with the necessary personal and business information as fifteen minutes of inactivity makes the online form refresh. Before clicking the ‘submit your application button’, make sure that your filled-in information is correct and true.
Consult an accountant
Although it is ideal that we get an EIN for our business, it is also advisable to consult an accountant first if you will be truly needing an EIN for your small business. Every business has its own nature and there are certain grey areas that we want to assess beforehand.
Prepare your documents
As we have also said, essential information about you and your business must be gathered first through the documents, so that you could prevent the unwanted circumstances that might occur due to insufficient necessary papers. Aside from your personal information, the IRS will, of course, need your business name, business address, and your chosen business entity. Small businesses most commonly start with sole proprietorship, partnership, and corporation type of business entities. Eventually, what most entrepreneurs do is convert their business into a limited liability company (LLC) for lots of its perks. Despite the fees for formation that may vary from state to state, the EIN for LLC cost is likewise free as the EIN application for small businesses.
Analyze the application policies and guidelines
As you go through the application, make sure you have absorbed and understood all the rules, policies, and guidelines before submitting it. By doing this, you could be confident and knowledgeable about the parameters of your EIN.
Make sure you completely answer the business-related questions
On filling out the form, ensure that you have all answered the questions about your business as the EIN is an identification number for your business. Incomplete information may lead to the incoherence of approaches that you may encounter in the future.
Get the EIN
You could now receive your EIN. Just make sure you have the copies of all the necessary documents about it for the purpose of emergency cases in the future.
Small business or not, acquiring the business essentials could help you today and in the future. Be guided with this blog for your EIN acquirement process.