Growing Your Business

Situations When Self-Employers Need to Apply for an EIN

by
Lidia Staron
on
3/27/2019
Situations When Self-Employers Need to Apply for an EIN

An employer identification number (EIN) is a unique set of nine numbers used by the Internal Revenue Service (IRS) to find tax accounts for people who are self-employed or who start their own business. This number, also known as the Federal Tax Identification number, can be used by a variety of business entities including corporations, employers, trusts, partnerships, non-profit associations, sole proprietors, estates of decedents, government agencies, and certain individuals.

How do you know when you need to apply for one?

The first step is to determine your eligibility. Ask yourself these questions:

  • Does your business employ anyone other than yourself? Or is it a corporation or partnership?
  • Do you file tax returns on Employment, Excise, Alcohol, Tobacco, or Firearms?
  • What about withholding income tax (not wages) paid to a nonresident alien?
  • Do you participate with a Keogh plan?
  • Is your organization involved in any:
    • 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
  • 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
  • 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

Also, take note that if you already have a number but your business ownership or organizations change you must reapply for a new one. If you answered yes to any of the above questions, then you qualify for an EIN.

How do you apply for an EIN?

Applying for an Employee Identification Number may seem daunting but being prepared and knowing how to go about it can help decrease this anxiety. There are several methods available depending on your preference.

Using the IRS online portal is the most popular method because you can apply for your EIN in the comfort of your own home. Anyone whose business, office, or agency is in the United States or U.S Territories and who have any valid Taxpayer Identification Numbers can use this online application. Be sure to note that these applications are limited to one responsible party per day as to keep the standard of fair and equal treatment.

The hours of operation for this portal are Monday – Friday from 7 am – 10 pm Eastern Time. You must complete the application in one session as to not lose your progress and then submit it for assessment. After validation, the IRS will assign your new EIN. A benefit to doing this online is you are able to view and print your assignment notice right away, without having to wait for it to be mailed to you.

Another way to apply for an EIN is through fax. You must first complete the SS-4 form (the IRS EIN application) and then send it to the appropriate fax number. This is available 24/7. As long as you remember to send them your return fax number, you can expect your EIN sent back to you within 4 business days.

Although it could take up to 4 or 5 weeks to get your EIN this way, mailing in your SS-4 application is possible. Make sure all the necessary information is filled out correctly and send it to your appropriate tax location.

For international applicants, you will need to call this telephone number: 267-941-1099 between Monday through Friday 6 am to 11 pm. To make this call you have to first be authorized to receive the EIN. During the call, you will be expected to answer questions off of the SS-4 form so filling it out beforehand can streamline the process.

Applying for an Employee Identification Number can be simple and harmless as long as you are prepared. Make sure you complete the necessary forms, and you can have the whole process over with in no time.

share this post
Search for matches...
Lidia Staron

Lidia Staron

Lidia Staron is a part of Content and Marketing team at OpenLoans.com. She contributes articles about the role of finance in the strategic-planning and decision-making process. You can find really professional insights in her writings.

Recommended Professionals

In the face of economic uncertainty, TaxBuzz is the industry's most up-to-date tax information.

Join 60,000 who get our weekly newsletter. No spam.

Need help selecting a firm?

Use our specialized search engine and get matched to the best accounting and tax firm for your needs.

Related Posts

Latest Posts