During 2021, the Internal Revenue Service processed more than 261 million federal tax returns and supplemental documents. Ensuring the correct information is attributed to the right individual or company is an essential part of that process. As a result, tax numbers are required since they’re unique designations that connect to just one tax filer or business entity.
For companies of all sizes, getting a business tax number is often essential. While some sole proprietors can use a Social Security Number (SSN), most companies need an Employer Identification Number (EIN) instead. If you need an EIN for your business, here’s how to get one.
When to Apply
Generally, company owners need to get an EIN before official business operations begin. Typically, EINs are required for specific business filings, including when applying for particular business licenses and permits, as well as handling tax filings and certain required payments. Additionally, it’s necessary to have one before the company starts operations to ensure that tax data is properly collected and attributed right from the beginning.
Even if an EIN isn’t technically needed for a particular business, having one is typically beneficial. It makes it easier to separate company operations from personal financial activities. As a result, even for sole proprietorships without employees or similar entities that aren’t necessarily required to have an EIN, getting one is a wise move.
The Application Process
The application process for an EIN from the IRS is straightforward. Companies need to complete Form SS-4, which is accessible through the IRS website. It’s also possible to complete the application entirely online.
When you fill out Form SS-4 or the online application, you’ll need to provide specific information about the business. Along with the company name, the name of the owner, primary partner, trustor, or another appropriate individual is required, along with their SSN or similar personal tax number. Additionally, the type of business entity, reason for applying, start date of the company, and its primary industry are needed on the application.
How Long Will It Take?
The amount of time it takes to get an EIN varies depending on how a business applies. If you complete Form SS-4 and send it in by mail, the process takes around four weeks once the IRS receives the application. That doesn’t include transit time for the form to get into the hands of the appropriate IRS department, so the total time could extend by several days. Additionally, other factors like federal holidays, unexpected technical issues, or higher-than-average demand may influence turnaround times.
If you fax a completed Form SS-4 to the IRS service center in your state, you can cut down the processing time. If you provide a return fax number, you may have an EIN in about one week. If you don’t have a fax number, you’ll typically get an EIN in around two weeks.
However, if you file for an EIN online, you can get an EIN immediately. The form processes incredibly quickly, allowing the IRS to return the required tax number through the online application within mere moments.
