May 20, 2024

What is the Process for Obtaining a Business Tax Number?

With almost 261 million returns and supplemental materials received in 2021, the IRS had a busy year. The process is very dependent on properly assigning data to the right entities. Tax numbers are essential because every individual or business must have a unique tax identification number.

A business tax number is required for every company, regardless of its size. An employer identification number (EIN) is often required for firms, while some single proprietors might be able to get away with just using their SSN. To find out where to apply for a business EIN, click here.

How to use
Before beginning official operations, it is usual practice for business owners to obtain an EIN. A business will typically need an EIN in order to pay bills, apply for licenses and permits, and file tax returns. Additionally, setting up an EIN before starting any commercial activity ensures accurate collection and attribution of tax data.

Regardless of whether your firm is legally required to have an EIN, we generally recommend it. This method simplifies the process of separating personal and corporate funds. Consequently, an EIN should be considered by all businesses, even those that are not required by law to do so, such as partnerships and sole proprietorships.

Application Process: Step-by-Step
One must adhere to the straightforward procedures laid out by the IRS in order to submit an application for an EIN. Businesses must complete Form SS-4, which is available on the IRS website. You can also complete the online application in its entirety.

Form SS-4, or the online application, will ask you to provide specific details about your company. Aside from the firm name, necessary information includes the names of significant individuals (such as owners, primary partners, trustees, etc.), as well as their Social Security numbers or similar tax identification numbers. The application must also include the type of corporate entity, date of incorporation, major industry, and reason for the application.

Then, how long does it take?
Each business has its own application procedure, so the amount of time it takes to get an EIN varies. Submitting your completed Form SS-4 via mail typically results in a processing time of approximately four weeks after the IRS receives it. The total time may be several days longer because it does not consider the time it may take for the form to reach the appropriate IRS department. In addition to the factors already mentioned, federal holidays, unanticipated technical issues, or higher-than-average demand could impact turnaround times.

For faster processing of your Form SS-4, you can send it via fax to the IRS service center in your state. Please provide a return fax number in order to acquire an EIN. The processing time is about one week. You can usually get an EIN in around two weeks, even if you don’t have a fax number.

But if you apply for one online, you can get an EIN quickly. After you submit the form, you can get your tax ID from the IRS on their website in a matter of minutes.

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