A “Tax ID Number” is a 9-digit number used for a national business identification system that helps the IRS track business activity for taxation purposes. If you are running any organization or business, you need to comply with the Internal Revenue Service and need a taxation identification number that will link your business activity to a federal central file. The asset that will do all this called a Tax ID number and this short guide will show you how to obtain your Federal Tax ID number painlessly online.
Steps to Understanding the Tax ID Number Application Process:
- Starting With Mandatory Business Information
- Applying to Obtain a Tax ID Number Online
- Obtaining a Tax ID Number Through Traditional Methods
- How To Obtain the Final Tax ID Number?
- Why Every Business Needs an EIN
1. Starting With Mandatory Business Information
Before you go down the path of obtaining a Tax ID number for your business, you need to have a good sense of required information. There will be data you need to submit to the Internal Revenue Service for processing and assignment of the employer identification number or EIN.
The first bit of information they are going to need is going to include details on who the responsible party is going to be. The responsible party will likely be the owner of the business. If it is a non-profit such as a church, you will want to name someone to this role. The person will be the individual that will do the submission for the EIN and work with the IRS if any questions ever arise. The responsible party will submit their name, address, date of birth, as well as Social Security Number. Alternatively, they may also submit an Individual Taxpayer Identification Number or ITIN.
You will need to gather a bit more in the mandatory business information space as well. The other bits of information you need to obtain an employer identification number will include the principal address of the business, as well as the first date it took part in the operation.
2. Applying to Obtain a Tax ID Number Online
In the event you are running a business of any kind and need an employer identification number, the easiest way to do that is to apply for the Tax ID number right online. It will take very little time and allow for an efficient application process overall.
The first big benefit to applying online is you will have the federal tax ID number in less than one hour. The Tax ID number is something you may need on the spot to hire an employee or open up a new bank account. You may not want to wait weeks and the online method helps ease that concern.
The online application form is also quite easy with the help of a tax ID service. The tax ID service will take care of the whole process, managing it start to finish so you can just take advantage of the speedy processing of the online application.
3. Obtaining a Tax ID Number Through Traditional Methods
There are some traditional methods of obtaining a Tax ID number as well. Some may refer to these methods as archaic, even, with the basis of how long they take for processing.
The mail and fax methods are two of the process that immediately comes to mind when you think of applying for a Tax ID number through a traditional method. With the mail and fax methods, you will need to be sure you have printed out the most up to date application form. When you complete them, you will either fax them or mail them to the Internal Revenue Service. The fax processing will take five business days or longer, while the mail application can take several weeks.
There is also a phone application method available. With this method, you or a tax ID service provider can place a call to the Internal Revenue Service to get the application process going. You may still have to provide forms or further information via paperwork to the Internal Revenue Service, but it gets the application process moving.
As a how-to guide in terms of obtaining a Tax ID number, the online application method is far and away the most ideal.
4. How To Obtain the Final Tax ID Number?
So what is the best path forward to obtaining the final and official Tax ID number? The first step in the puzzle is to get together all the information on the responsible party. You need their name, address, etc. You also need to get information about the business. What is the address of the headquarters of the business and what was the first date of operation?
Once you have the information, you want to submit to a tax ID service provider. The service provider will review all the information to be sure that the application is complete and accurate.
The tax ID service provider will do the submission to the Internal Revenue Service and await for processing. Once that completes, you should end up with the generation of your Tax ID number.
5. Why Every Business Needs an EIN
Every single business is going to need to have an employer identification number. Whether you are a big corporation, a sole-proprietorship, or even a non-profit church, you need an EIN to track all your business activity against. When you go to open up bank accounts in the name of the business, hire employees, that number is crucial. It is also important at the tax-filing time as the IRS uses it to ensure you are up to date and accurate with your tax filings and related tax payments.
Making sure that you understand what a Tax ID number is all about and why you need one is important. The guide we have laid out above gives you insight into how to get a Tax ID number, why it is important, etc. As someone who is running a business, you need awareness of the Tax ID number so you can act. Follow the Tax ID number how-to guide so you can get down the path early to obtaining the number and being in full compliance with the Internal Revenue Service from day one of operation.