Just like Social Security Number, an Employer Identification Number is essential for some specific business work. Almost every business requires an EIN, and after a while, we will elaborate on which business must need it.
For federal income tax, you have to identify your business, and this is the most important reason to have an EIN of your business. Apart from this, if you want to open a bank account for your business, if you want to apply for a loan for your business, if you want to apply for a business license or any other registrations and tax purposes, you must have to have an EIN.
Let’s now know what an EIN is.
What is EIN Number
The full form is Employer identification number, and it is an exceptional number that will assist in finding your company’s information and most important for state and local tax purposes.
For all registered businesses, it mandatory to have an EIN. For government work, it will be your business identification number. Also, it will be recognized as your Tax Identification Number.
When your Business Need an EIN Number?
Any business entity can apply for EIN, but for some instances, it is legal to obtain one. So,
- If your business has employees
- If your business pay excise taxes
- If your business is registered as a partnership or corporation
- If your business falls under tobacco, alcohol tax regulations
- If your business requires a business bank account
- If your business withholds taxes
- If your business requires a license to operate
Then your business must have an EIN.
We have seen lots of people who have suffered because they mixed up their personal and business taxes. If you want to stay away from such kinds of problems, it is recommended to have one EIN, which will separate both kinds of taxes, even if you are operating a sole proprietorship or LLC where you don’t have any staff.
Moreover, without EIN, you have to use your SSN for tax-related issues, which leads to an increase in identity theft.
Remember, in some cases, and you may have to apply for a completely new EIN, alteration of the existing one won’t work here. Some cases are as follows when you have to reapply for an EIN-
- When you change your business types such as- from sole proprietorship converted in partnership business
- When you have obtained an existing business
- When you file for bankruptcy
How to Get an EIN Number?
In every country, they have their website for dealing with taxes, revenue, etc. Such as- CRA, IRS, etc. You can apply for EIN by calling, faxing, or by online submission of the form. Online submission is the easiest way.
Be careful, and there is some fraud website. Check before applying if you are applying to the authentic website or not.
How to Find EIN Number?
In can happen that you are working with your business tax documents or any other business works where you need the EIN, but you fail to remember that.
It would be best if you searched for the EIN in available documents, for instance- tax return documents of your business, the receipt which you have got after applying for EIN, it should be either in an email or in a letter format.
Also, if you have applied for registration of your business, if you have applied for a business bank account, if you have applied for a business loan, you must have some documents related to these where the EIN would be mentioned.
However, if you can’t find EIN from any documents, you can contact your country’s organization, which is responsible for dealing with taxes, revenues, etc. such as- IRS (USA), CRA (Canada), etc.
How to Find EIN Number of other Businesses?
Sometimes, maybe you are in a condition when you have to confirm other businesses ‘ information or your business needs information about other businesses for collaborating, etc.. You will need to find EIN of others.
For publicly traded business, it is quite easy as they will be registered on the SEC (Securities and Exchange Commission), where you can find the EIN. So, search on the SEC website.
If the company is not publicly traded, then maybe contact the business’s finance or account department can help you. You can also search if the business has filled any registration form online. From there, you can find the number or obtain one business credit report of that company.
Having an EIN for your business is quite beneficial. It is mandatory for some specific cases, and it will also reduce hassle for tax-related issues.
If your business doesn’t have an EIN, take it now. It will accelerate overall business work such as- tax payment getting a loan, getting a license, etc. Getting an EIN takes just a few minutes of work, so start your procedure now.