What Is EIN?
An EIN or Employer Identification Number, also known as a Tax Identification Number is a unique number that is assigned by the IRS to a business entity for tax purposes and other business-related transactions. This number is used to file tax returns and report credits.
How to Obtain an EIN in the US
Here are the steps that you need to take to obtain an EIN:
Start Your Business
Before applying for an EIN, organizations (both for-profit and non-profit) should be viable business entities. You need to submit business registration documentation for your business to reach legal status with the Secretary of State in your area.
Any business can obtain an EIN. That includes businesses that are established using the owner’s SSN like in a sole proprietorship or S Corp. They are eligible to get an EIN but are not obliged to do so. That said, business owners should consider getting an EIN because of the better privacy protection it offers compared to an SSN.
Contact the IRS
Once the business entity has been legally established and all the documentation required is signed, the next step is to reach out to the IRS. you can do this via:
- Phone at 800-829-4933
- Online at irs.gov
You may also choose to file in writing using the IRS Form SS-4 that you should then submit to the address indicated in the form.
What to Expect Upon Filing the SS-4
The processing speed depends on the method of submission, too. If you contact the IRS via phone, you will get an EIN instantly while fax applications get an EIN within four working days. On the other hand, written applications will have to wait up to five weeks to get their EIN.
Advantages of Forming an LLC
An LLC or Limited Liability Company has many benefits, including protection from liability, enhanced professionalism, and taxation benefits, among others. Additionally, LLCs have a more flexible process for administration. That is unlike corporations that require a board of directors as well as a management team that works for the shareholders.
Which Should You File First?
It is necessary for a business to file for LLC before obtaining an EIN. This is because you are not guaranteed your business name unless it is registered. Aside from that, the new regulation of the IRS requires you to file the articles of incorporation together with other documentation before a business can obtain an EIN.
Now that you know that you should obtain an EIN in the US after filing for LLC, you can better prepare for what you need for your business. If you need help in setting up your business, you should seek the help of a professional so you can be sure that you’re taking the right steps and avoid any mistakes, too.
Doola is a reputable partner that can help you form a company in the US the right way. Whether you need to obtain an EIN in the US or you need to understand all the basics of setting up a business, Doola is here to help you. Contact us today to know more about our services!