pexels-sora-shimazaki-5673488 (1)

What Is An EIN?

An Employer Identification Number (EIN) is a unique nine-digit number assigned to businesses and other entities by the Internal Revenue Service (IRS) for tax purposes in the United States. It is also known as a Tax Identification Number.

You can think of an EIN like a Social Security Number for your business. An EIN is used to identify a business entity and is required for various tax-related purposes, such as filing tax returns, opening a bank account, and hiring employees. It is similar to a Social Security number for individuals, but is used for businesses and other entities.

Having an EIN is imperative for several reasons. Firstly, it helps the IRS identify your business for tax purposes. It’s required for any business that has employees or operates as a corporation or partnership. Secondly, it allows you to separate your personal and business finances, which is essential for maintaining accurate financial records and protecting your personal assets. Lastly, many vendors, clients, and financial institutions may require your EIN for various transactions, so having one streamlines business operations and builds credibility.

  • File taxes
  • Open a bank account
  • Hire employees
  • Apply for credit
  • Register for licenses and permits

Other entities like non-profits, trusts, and estates also need an EIN to file tax returns and comply with other regulations.

You’ll need an EIN when establishing a legal presence in the United States.

You can receive an EIN directly from the official IRS website at irs.gov.

demo-attachment-707-anas-alshanti-feXpdV001o4-unsplash-e1584533187369

Should I Apply for an EIN Before I Register My LLC?  

It is highly recommended that one should register their Limited Liability Company (LLC) before applying for an Employer Identification Number (EIN). Here are some reasons why:

  1. Legal Entity: Registering an LLC establishes it as a legal entity, which is a requirement for obtaining an EIN.
  2. Unique Name: Registration ensures that the LLC name is unique and not already in use by another business.
  3. Business Structure: Registration defines the management structure and ownership of the LLC, which is essential information required on the EIN application.
  4. State-Specific Requirements: Registration fulfills state-specific requirements, such as filing articles of organization and obtaining necessary licenses and permits.
  5. Tax Purposes: An LLC is not recognized as a tax entity by the IRS, so an EIN is needed to file taxes. Registering the LLC first ensures that the EIN is tied to a legitimate legal entity.
  6. Banking and Credit: A registered LLC can open a business bank account and establish credit under the EIN, essential for separating personal and business finances.
  7. Compliance: Registration and obtaining an EIN demonstrate compliance with federal and state regulations, avoiding potential legal and financial consequences.

In conclusion, registering an LLC before applying for an EIN is crucial to establish a legitimate legal entity, ensure compliance with regulations, and enable essential business functions like banking and tax filing.

demo-attachment-703-jakob-owens-gRkSYe-JYi0-unsplash-e1584533052930

How to Apply for Your S-Corp’s EIN

To apply for an EIN for your S-corp, you will need to provide basic information about your business, including its legal name (as it appears on tax returns), DBA (or “doing business as” name, used on signs), and the name of a responsible person (one of the main shareholders or owners, who must be a human being). You will also need to provide the responsible person’s tax ID number and contact details. Additionally, you will need to indicate the type of business structure (choose “corporation” even if you are an S-corp), note if your S-corp is also an LLC and the state where it was formed, and provide details about your company (including the state or country where it was formed). You will also need to indicate why you are applying for an EIN, provide information about your employees (including the number and anticipated withholding tax), and describe the nature of your business (choosing from a list of common industries). The application will guide you through these steps and provide a list of common answers to make the process easier.

demo-attachment-705-raphael-koh-MX_6QAqaYfQ-unsplash-e1584533159587

How to Obtain an EIN (Tax ID) Number in New York: A Step-by-Step Guide

New York’s economy is one of the largest in the world, offering vast opportunities for new businesses. However, starting a business in the state requires navigating tax and regulatory requirements. One essential step is obtaining a federal Employer Identification Number (EIN) from the IRS and a New York tax ID number from the state. This guide explains how to apply for an EIN online and through the mail, and answers common questions about the differences between EINs and state tax IDs.

Applying for an EIN in New York is easier than you might think. The basic steps include:

  1. Preparing the required information
  2. Completing the application
  3. Submitting the application
  4. Waiting for your number

Online applications typically take just a few minutes, while mailed applications may take several weeks.

To apply, you’ll need the following information:

  • Business basics (name, type of entity, principal line of business, etc.)
  • Information about workers (anticipated number of employees, etc.)
  • Name of a responsible party (typically an owner)
  • Reason for applying (hiring employees, opening a new business, etc.)

Note that estates, trusts, non-profits, and other entities may also need EINs.

Apply Online:

  • Fastest response (typically immediate)
  • Requires stable internet connection and required information

Apply by Mail:

  • Print and complete Form SS-4
  • Mail in the form and wait for a response (4-6 weeks)