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How Do I Find an EIN?
No doubt, there are probably quite a few regulatory and administrative items on your new business checklist – getting a permit, registering your business name and more (check out these 10 steps to starting a business for a useful reference point).
One of the key requirements for most new businesses (or businesses that are restructuring) is obtaining an Employer Identification Number, or EIN, from the IRS.
Here’s what you need to know about EINs and how to go about getting one for your business.
What is an EIN?
An EIN is a unique nine-digit number that identifies your business for tax purposes. Think of it as the business equivalent of a social security number (although it shouldn’t be used in place of it).
As a business owner, you’ll need an EIN to open a business bank account, apply for business licenses and file your tax returns. It’s a good idea to apply for one as soon as you start planning your business. This will ensure there are no delays in getting the appropriate licenses or financing that you need to operate.
Who needs an EIN?
An EIN is needed by any business that retains employees. However, non-employers are also required to obtain one if they operate as a corporation or partnership.
Not sure whether you need an EIN? Check out this guide from the IRS. Answering yes to any of the questions in the list means you need one for your business.
Other quirky rules apply, particularly as your business grows, so be sure to check out this guide from the IRS – Understanding Your EIN – for a complete breakdown of the nuances of who needs an EIN.
How to apply for an EIN
The easiest way to apply for your EIN is online via the IRS EIN Assistant. As soon as your application is complete and validated, you’ll be issued an EIN. There is no charge for this service (beware of Internet scams that will try to sell you their EIN application services).
Changing your business structure? Get a new EIN
As your business grows and matures, you may choose to change its legal or ownership structure. For example, a sole proprietor may decide to incorporate or a partnership may be taken over by one of the partners and is operated as a sole proprietorship. In instances such as these, your business will need a new EIN.
There are other scenarios that require a new EIN, such as bankruptcy, a change in a corporation’s name or location and reorganization of a corporation. Check out Do You Need a New EIN? for a complete guide by business structure.
Using your EIN to make tax deposits
If you have employees, you will have been automatically enrolled in the Electronic Federal Tax Payment System (EFTPS) when you applied for your EIN. This allows you to make tax deposits, including estimated taxes and federal employment and corporate taxes, online or by phone.
Lost your EIN?
If you lost or misplaced your EIN, you can retrieve it in the following ways:
- Reference the original notice issued by the IRS when you received your EIN or call the IRS Business & Specialty Tax Line at 800-829-4933.
- If you used it to open a bank account or get a license, contact these organizations they should be able to retrieve your number.
- Find an old tax return. Your EIN should be on it.
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How to Register Your Small Business in Four Steps
“How do I register my business?” is one of the most common questions that new small business owners have. The answer, unfortunately, isn’t as simple as “Go here and fill out this form.”
For most new businesses, the process of getting registered involves several steps (and not always in this order):
- Registering your business name or trade name
- Registering your business as a legal entity – Limited Liability Corporation (LLC), corporation, etc.
- Registering with the right tax authorities
- Registering for the appropriate licenses and permits
Let’s break it down, so that you can see what action is needed on your part one step (and sub-steps) at a time:
1. Register your business name
If you choose to name your business as anything other than your own name, then you’ll need register that trade name or “doing business as” (DBA) name with your state. For example, a sole proprietor called John Smith might choose to operate his business as “JS Painting.” Corporations and LLCs can also register alternate names (as long as they are not being used by other businesses in the state).
There are other factors to consider before you register your trade name, such as trademark infringement. Read more about this and other considerations in SBA’s Choose Your Business Name guide then follow these steps for registering your business name.
2. Register your business as a legal entity
This step will not be required by all businesses. However, if you do decide that your business could benefit from a formal legal structure, such as an LLC or S Corporation, then you’ll need to register your business and file certain documents (articles of incorporation) with your state government. Read more about the different business entity options available to you in this Choose your Business Structure guide.
Many new and small businesses operate under the most basic form of business type – sole proprietorship. A sole proprietorship is basically an unincorporated business owned and run by one individual (no partners are involved), with no distinction between the business and its owner. If you choose this option, you can skip this step and move on to the next one.
3. Register your business with the IRS and state revenue office
Take note of the various sub-steps in this section:
If you have employees, any business partnerships, are a corporation or other organization, you'll need to apply for an Employer Identification Number (EIN). If you don't need an EIN, you can simply use your Social Security Number to administer your business finances.
You’ll also need to request quarterly estimated tax vouchers from the IRS and your state revenue office. These are filled in and returned with your quarterly payments. You can download the IRS forms (1040-ES) here.
If you expect to collect sales tax from customers (for example if you operate a retail or food-service business), you may also need to apply for a sales tax permit from your state’s revenue office.
4. Get the right business licenses & permits
All businesses need some form of license or permit in order to operate legally. This often comes as a surprise to new business owners, especially online and home-based businesses.
From professional licenses (doctors, hair stylists, etc.) to home occupation permits and more, find out what you need in: What to Know about Small Business Licenses and Permits.
If you’re still not sure which licenses apply to your business, contact your local Small Business Development Center, SBA Regional Office or state’s Department of Commerce (they can often connect you with local business resources).
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