Running a nail salon can be an extremely lucrative, rewarding, and fun. In addition to taking care of your clients nails and helping them to look great, you also have to manage a lot of tax and banking related information for your business, and to handle many of those tasks, you need an Employer Identification Number (EIN) for your nail salon.
How do you apply for an EIN for your nail salon? You simply need to gather information about your nail salon, fill out the EIN application, submit the application online, through the mail, or using fax, and wait for your number to arrive. To guide you through the process, here is a detailed look at the steps involved.
Steps to Applying for a Nail Salon Business Tax ID (EIN) Number
- Gather Information About Your Nail Salon
- Determine Why Your Nail Salon Needs an EIN
- Note Details About Employees at Your Nail Salon
- Decide Where to Apply for a Nail Salon EIN
- Submit the EIN Application and Wait for Your Number
- Receive Your Nail Salon EIN
- Start Using Your EIN
1. Gather Information About Your Nail Salon
The EIN application process requires key details about your business. Get this information together before you start the application. Then, you can complete the application quickly and easily, and if you’re applying for an EIN for your nail salon online, you don’t have to worry about being timed out of the application while you look for extra details.
The information you need for a nail salon EIN application includes basic details about your nail salon such as its name, the “doing business as” (DBA) name if applicable, address, phone number, and other essentials. You also need to select a responsible party. In most cases, this is the owner of the company, but you need to list a person. You cannot have a corporation, partnership, or other non-person entity as your responsible party.
The application requests information on the structure of your business. You can choose between all the relevant tax structures such as a sole proprietorship, partnership, corporation, or nonprofit.
Note that if your business is an LLC, you have to choose another type of business structure on the application. You should use the structure that applies to your nail salon’s
tax situation. For instance, if you have a single member unincorporated LLC, you get taxed as a sole proprietorship so you should select that option on your EIN application.
2. Determine Why Your Nail Salon Needs an EIN
The EIN application also asks why you’re applying for an EIN. Businesses use EINs for a wide range of purposes, and some of the options you may select include the following:
- Starting a new nail salon
- Purchasing an existing nail salon
- Changing the business structure of your salon
- Hiring employees for your nail salon
- To be compliant with IRS withholding regulations for foreign-based independent contractors
- For banking purposes such as opening an account or taking out a loan in your nail salon’s name
- Creating a pension plan
If you need an EIN for multiple purposes, you should just select the option that is the most relevant to your situation. You can also type or write in an alternative answer if none of the listed options apply to your business.
3. Note Details About Employees at Your Nail Salon
As you may be aware, EIN stands for Employer Identification Number, and although you use this number on all kinds of forms and documents for your nail salon, it’s a must-have on employee tax and payroll forms. In fact, many people apply for an EIN for their nail salon just because they are ready to bring on their first employee, and you cannot hire employees without this number.
Because this number is required for employers, the application asks for information about your employees. You have to note which industry your business is in. If none of the existing categories apply to your salon, you can choose “other” and write in “health and beauty services” or whichever industry best describes your business.
Then, you have to note how many employees you have and whether they fall into the agricultural, household, or other category. For your nail salon, most employees are likely to be “other” as they are not agricultural or household workers.
Take some time to estimate how much you plan to pay your employees over the following calendar year. Then, calculate what your payroll taxes are likely to be for the year. The EIN application requests information about whether or not your nail salon is likely to owe more than $1,000 in payroll taxes through the year.
4. Decide Where to Apply for a Nail Salon EIN
You can apply for an EIN for your nail salon using the internet, the mail, or a fax machine. You can only apply over the phone if your business is based in another country, but that does not apply to must nail salons.
5. Submit the EIN Application and Wait for Your Number
After you complete your application, you just need to submit it and wait for your number. With an online EIN application, you simply hit submit, and the application gets electronically dispatched to the government. To submit a paper EIN application, you have to fax it to the number or mail it to the address on the form.
6. Receive Your Nail Salon EIN
If you apply online, you should receive your nail salon EIN over the internet almost immediately. In some cases, you may have to wait a business day. For a faxed application, you only need to wait about four business days for your EIN. With a mailed EIN application, your nail salon should receive a response within four to six weeks.
7. Start Using Your EIN
Once you have your EIN, you can start to use the number right away. Now, you can fill out employee payroll forms, submit payroll taxes to the government, fill out requests to have your nail salon taxed as an S-corp, or deal with multiple other types of federal tax documents related to your business. You can also use your EIN on banking documents, and if you need to apply for a tax ID from your state, you can also use this number on that application.