How to register for a tax ID
Before you can register for a tax ID you are actually going to know what one is and what it is used for. A tax ID is actually called a Federal Tax Identification Number or an Employer Identification Number. The purpose of a tax ID is to identify your business, which means that pretty much any business is going to need a tax ID, but there are exceptions. And in some case business are going to need to apply for a new tax ID. But whether you need are a new business or an established business you are still going to have to follow the same steps when registering a tax ID.
Difficulty rating: Easy
The first thing that you are going to need to do is to determine if your business needs a tax ID. In order to figure this out you are going to need answer a few questions and if you answer yes to any of the questions you are going to need to register for a tax ID. The questions are:
- 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?
- Are you involved with any of the following types of organizations?
o Trusts, except certain grantor-owner revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
o Real estate mortgage investment conduits
o Non-profit organizations
o Farmers' cooperatives
o Plan administrators
The next thing that you are going to need to do is to figure out if you are going to need to register a new tax ID. This step only applies to pre-existing businesses. Basically the only time that you are going to need to register for a new tax ID number is when your business changes ownership or the structure of your business changes. But depending on the type of business you are running you might need to apply for a new tax ID number in other situations. Here are some situations in which you might need to register a new tax ID:
- Sole proprietors
o You are subject to a bankruptcy proceeding
o You incorporate or take in partners and operate as a partnership
o You purchase or inherit an existing business that you operate as a sole proprietorship
o A new corporation is created after a statutory merger
o The corporation changes to a partnership or a sole proprietorship
o Corporation becomes a subsidiary of a corporation or you are a subsidiary of a corporation using the parent company's tax ID.
o Receive a new charter from the secretary of state
o The partnership is taken over by one of the partners and is operated as a sole proprietorship
o The old partnership is ended and you begin a new one
The next thing that you are going to need to do is to determine which method you are going to use to register your tax ID. Currently the choices that you have are: apply online, apply by EIN toll-free telephone service, apply by fax, or apply by mail. Depending on which method you choose the instructions will vary.
If you apply by fax or by mail you are going to need to fill out a Form SS-4 which will include all of the information that the IRS needs to have to register your tax ID. The timeframe to apply by mail is about four weeks, while if you fax the application (using your states fax number) the timeframe is about four days.
If you apply online or by phone you will be able to receive a tax Id number as soon as the process is complete, which is usually within minutes of registering the tax ID.
- https://www.irs.gov/businesses/small/article/0,,id=97860,00.html -this is the link that provides detailed instructions on how to register a tax ID or EIN. It also includes links to apply online or provides you with the phone number you need to call in order to register the tax ID by phone.