Around 600,000 small businesses are started each year. But there is one important step for any new business to become a legitimate economic player.
You’ve built the business plan, attracted your co-founders and investors, and registered for your business structure. Now you need to complete one more step quickly to play in the big leagues of business.
This is the time for you to apply for an Employer Identification Number (EIN).
An EIN gives you the power to issue payroll, open business bank accounts, and file tax documents. Your business steps into a higher level of authority when associated with an EIN. Receiving one is straightforward when you know the best way to apply for your needs.
Continue reading to find more information on this step of starting your business and how to apply for an EIN in four simple ways.
What Is an EIN?
You started your business recently and are excited to get it off the ground. You followed your business checklist to ensure you completed all proper procedures.
But now you must consider your next step and answer an important question: who needs an EIN, and what exactly is it?
An employer identification number is a unique identifier given to your business from the IRS. Companies use EINs for different purposes, including applying for a business bank account and payroll for employees. Its primary purpose is as a tax identification number for your business.
An EIN is like a social security number for a business.
As an important documentation item, many businesses apply for EINs no matter what their ultimate use is. EINs identify many different business structures, including LLCs, sole proprietorships, and corporations.
If you are a business working in the US, you should apply for this unique nine-digit code.
How to apply for an EIN is a straightforward process, especially when preparing ahead of time. The application needs someone to be listed as the responsible party. You must identify a person who manages and controls the entity to take on this role.
You can ease the application process even more by filling out the IRS SS-4 Form ahead of time. Completing this document beforehand means you’ve already done the hard work.
1. Applying for an EIN Online
The easiest way to apply for an EIN is through the IRS website. You can access the online application during regular business hours, Monday to Friday, 7 AM to 10 PM EST.
You need to complete the application in one sitting, and it will expire after 15 minutes of inactivity. We encourage you to block out your calendar for the EIN application, so you aren’t distracted from the process.
Your business must be located in the US to apply online. The individual applying must also have a taxpayer identification number, such as a social security number.
Meeting these requirements means you will receive an EIN upon submitting the online application. The portal is the most straightforward application method out of all ways. However, you may have needs that eliminate you from this approach and into one of 3 other ways listed below.
2. EIN by Fax
For the more old-fashioned business owners, you have the option to fax in your EIN application to the IRS.
You must first fill out the SS-4 Form in its entirety, and you should triple check your application before faxing to ensure speed and ease. You don’t want to submit any incorrect information as a simple accident can lengthen the process.
The IRS has different fax numbers, depending upon where your business resides. Make sure to send to the fax number that best fits your situation.
Applying via fax takes more time than the instant online acceptance you’ll receive. Yet, providing a return fax number on your application will bring your new EIN within four business days.
3. Sending the Application by Mail
You have the option to apply for an employer identification number through the mail. This method has the longest processing time and can take up to four weeks to receive the EIN.
Like the fax method, you must complete the form and triple check for accuracy. You can then address it to the proper IRS building based on your business’s residence.
Sending the mail application means you will also receive your EIN documentation in the mail. Postal services tend to increase the timeline. It’s encouraged to use this as a last resort for applying, so you aren’t waiting needlessly.
4. Applying by Phone
Your final option for EIN applications is by phone. This method is essential for international applicants. Businesses outside of the US can only apply over the phone to obtain their identification number. The individual calling must be the one to receive the EIN (i.e., he or she must have a taxpayer identification number).
Businesses in the US are welcome to apply via phone. You should still have completed the form and use that to answer any questions the IRS representative will cover.
You receive an EIN at the end of the phone call. Applying in this way is another easy and quick method for getting your business in order.
Easy Way to Solidify Your Business
Starting a business fills you with momentum as the owner. You don’t need things stopping you from building your dream quickly. Securing your EIN ensures efficient tax and employment procedures moving forward.
How to apply for an EIN is straightforward using phone, fax, mail, or online services. Make sure to double-check your business eligibility and requirements to identify the best path.
Don’t stop there with proper IRS procedures! Dive into our taxation services to double-check that your business accounting and tax needs are always secure.