Employer Identification Number stands for EIN and is often referred to FEIN or Federal Employer Identification Number. EIN is a nine-digit unique number that is used to identified the business entities and is used to –
Open a bank account – Banks need to have an EIN (or SSN if EIN is not needed) so as to open a business bank account.
Apply for the business licence and permit – Most of the business licence and permit require an EIN (or SSN) before granting one.
For filing of the tax return – In order to file state and federal tax return, EIN is used to identify the business entity.
For hiring employees – EIN is the account number which is used to track the business employment taxes. These may include the taxes such as payroll tax, income tax withholding and unemployment.
According to the Internal Revenue Service (i.e. IRS), you must need to obtain an EIN if –
- You formed a corporation or partnership in United State.
- Your business need to file the employment, excise or Alcohol/Tobacco/Firearms tax returns.
- If you are involved with a trust, estate, real estate mortgage investment conduit, non-profit, farmer’s co-operation or plan administrators.
If you form a United States LLC and your business does not fall in any of the above categories, then you do not need to have a Tax ID or EIN.
How much does an EIN Cost?
IRS provides an EIN to organization free of cost in about ten minutes from the IRS website. Getting an EIN is very easy and cost you nothing while filing an EIN from the Internal Revenue Service (i.e. IRS). You need to fill the Application Form SS-4 and send it to the IRS website.
However some of the companies offer you an EIN by charging you some fee. This fee may range from $25 to $149. These companies may include the IRS Tax ID Number, SmallBiz, Bizfilings and Lawyers Aid Service.
Applying for an EIN Online
Applying for an EIN Online is the easiest and the fastest way. In order to apply for an EIN online, one must need to visit IRS website between the hours of 07:00 AM to 10:00 PM (Eastern Time) from Monday to Friday. It will take you about 10 minutes to complete the application form. To qualify to use the online application for an EIN, your company need to be in United States. The person applying for an EIN online need to have a valid Taxpayer Identification Number (i.e. SSN, ITIN and EIN).
Apart from all these you need to complete the Application Form SS-4 in one session as you will not be able to save and return at a later stage. In case your session get expired due to the inactivity for more than 15 minutes, then you need to start over again from the beginning. This rule applies to the corporations, partnerships and some other entities that are applying for an EIN. One can get an EIN by online instantly once you have completed the application form and your details have been validated. You may then download, save and print your Employee Identification Number i.e. EIN confirmation notice once your details are validated in application form.