As a new business owner, there is a lot of paperwork involved in the creation of your new company. One of the most critical components that you need is your tax ID number, as the IRS will want to make sure that you’re paying taxes correctly on your new income. For some businesses, you can use your personal tax ID (your social security number) for your business, but if you plan on hiring employees, then you will need an EIN number. But how do you get an EIN number, and how do you know if you need one?
What is an EIN?
If you are going to start a sole proprietorship, meaning that you will be the only person involved in your business, then the simplest way to file your taxes is to use your SSN instead of creating a separate entity. However, that also means that you cannot hire employees, which can be limiting.
A limited liability company (LLC) or a corporation, however, does allow you to retain workers as long as you get an Employer Identification Number (EIN). Because you are creating a separate entity from yourself (your new company), you have to apply for a federal tax ID to process your income and taxes accordingly.
Online EIN Application
Once you have filled out the requisite paperwork to become a corporation or LLC, then you can file for an EIN on the internet through the IRS’ website. The process is relatively straightforward, and once your information is verified, then you should receive a number immediately. If not, then you can check the status of your application through this link https://www.irs-ein-tax-id.com/tracking.
Overall, getting an EIN number should be one of the easier things you can do as a new company, and if you have any questions, you can contact the IRS directly.