EIN

What is a (EIN) Federal Tax ID?

Employer Identification Number

Have you ever come across the term Federal Tax ID or EIN? An EIN, also known as an Employer Identification Number, is a Federal Tax Identification Number that is used to identify a business entity. The IRS requires most business entities to have a federal tax ID (EIN), which includes corporations, partnerships, most LLCs, and some sole proprietorships. However, even if it is not required by the IRS, having a federal tax ID offers other benefits.

Reasons to get a federal tax ID (EIN)

There are several reasons why getting a federal tax ID (EIN) is essential for most businesses. If your business has employees or files taxes, you will likely need a federal tax ID to issue W-2’s or 1099’s. Furthermore, most banks ask for a federal tax ID before opening a business bank account or line of credit. Additionally, sole proprietors may use a federal tax ID to help keep their own Social Security numbers private, thus reducing the risk of identity theft.

• Essential for most businesses. If your business will have employees or file taxes, you probably need a federal tax ID from the IRS in order to Issue W-2’s or 1099’s
• Often required for business banking. Banks usually ask for a federal tax ID before opening a business bank account or line of credit.
• Helps shield against identity theft. Sole proprietors may use a federal tax ID to help keep their own Social Security numbers private.

Who needs a federal tax ID?

• Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
• Estates
• Real estate mortgage investment conduits
• Non-profit organizations
• Farmers’ cooperatives
• Plan administrators
• Corporations ; LLC’s, S-Corporations, C-Corporations, Partnerships and Some Sole Proprietors

If you are any of the above mentioned Entities you will be needing a Federal Tax ID. Also if you answer yes to any of the Following Questions.

• Do you have employees?
• Do you operate your business as a corporation or a partnership?
• Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
• Do you withhold taxes on income, other than wages, paid to a non-resident alien?
• Do you have a Keogh plan?

How do you want to get started?

Are you interested in obtaining a Federal Tax ID? You can receive the same level of service and expertise from the comfort of your home or our offices. We offer three convenient ways for you to receive your Federal Tax ID.