Here you will learn about Filing for a tax id. A tax id is called the EIN number for holding your business. A business owner needs a tax ID when he files business taxes. A sole proprietor without employees doesn’t need to file for a tax ID.
The tax ID is not required if you are an LLC and you are not having any employees in your business. Then use your social security number as your tax ID. File for an EIN number if you are a sole proprietor and your filing pension or excise tax returns. Get instances, where obtain a new employer identification number from the IRS portal.
When you need Tax ID?
- If you are having your existing business and you just want to run it as a sole proprietorship.
- Furthermore, you will require the tax ID when you change business from a sole proprietorship to a corporation.
- On the other hand, if your business changes from a partnership to a corporation or to a sole proprietorship
- It is required when your business changes from Corporation to a partnership or a sole proprietorship.
- EIN is required when there is the owner but he is individual. Suddenly he dies and the business is taken over by the estate.
How do I apply for an EIN number?
For filing for a tax ID, you have to just adhere to some of the following steps. By following all the steps you can easily apply for having the EIN. We will discuss this in the below section provided.
First of all, get information that you can use your social security number as your tax ID. If have a social security number, then it works as a tax ID number. This will work in case when you want to open a personal bank account. Furthermore, if you are hired as an employee. When you are applying for a passport. When you are applying for a federal student loan then your SSN will be working as a tax ID.
- Need Tax ID when applying for getting Medicare and the social security benefits.
- Applying for getting the public as it stands like I want to have unemployment insurance.
- There along with this if you want to check your credit rating.
- Only then definitely you can use your SSN number as your tax ID number.
When should you apply for having a EIN number?
Don’t apply for EIN when you are operating a sole proprietorship for an LLC with no employees. Particularly in this case, you will use your social security number as your tax ID. obtain an EIN number if you are a sole proprietor and you are filing pension or excise tax returns also.
For having a tax ID number firstly you should have a social security number. Not having the social security number then you have to firstly apply for getting the SSN. After getting the social security number you will be eligible to apply for having the tax ID number.
Difference between the Tax ID and SSN-
The difference between the tax ID and the social security number is-
The taxpayer identification number is that identification number that is used by the IRS in the administration of tax laws. Basically, it helps to identify the business entity type. it is mandatory to have EIN when you are applying for a business loan, or hiring employees to expand your business as well.
A social security number is a number that is basically issued by the SSA. so obviously, the authorities are totally different. Because the authority of providing EIN is different and social security numbers’ authority is different.
How can I apply to get my EIN?
You can apply to get your tax ID number from different modes. Apply to have EIN from the online portal of the IRS website. see the details related to your business and submit the application there. after submitting the application you can directly get your employer identification number on the immediate basis. for the more, if you are applying it by mail or by fax so, mail will take approximately 4 weeks to get your tax ID number.
But prior to that you have to fill the SS4 form or do not forget to recheck all those details filled. On the other hand, apply it by fax. so fax the correct number or address of the IRS. you will get your tax ID number within 4 business days. if you are an international applicant then definitely you can ask for getting your tax ID directly to the IRS.
So this is the relevant information related to filling the tax ID number. if you are finding any kind of obligations while proceeding with the process then please let us know. we will definitely try and resolve your queries as soon as possible.