If your business is a start-up and you have hired employees, then it compulsory for you to get an EIN number. However, if the people who work for you are not your employees and are rather independent contractors, then you do not require EIN. You need to understand the laws regarding taxes when you are running a business, whether is to be an old one or a start-up. Furthermore, if your business is generating income or not, you still need to file your tax returns and so require an EIN. Getting an EIN number is the first thing on your checklist when you are having a start-up business underway. Getting an EIN is a mandatory requirement for all those business owners or firms which have hired employees, are dealing with organizations listed on IRS website and/or are run as corporations or partnership based businesses. The same condition applies if your business withholds taxes on income or has a Keogh plan.
With the EIN in hand, you will be able to manage taxes such as income taxes and withholding taxes which will be a part of the incomes of your employees. Furthermore, you can create your own business account on the name of your business using your EIN. For other identification purposes, you should use your Social Security Number while for business related activities EIN is to be used.
A business account run by an EIN and other personal accounts that you may have run by your Social Security Number will help you not mix business amounts with your personal ones. EIN is also safe to give to your business associates or clients as they cannot steal your identity using it which can otherwise be done if you disclose your Social Security Number to other people.
You should apply for an EIN once you are starting up your business. There are various ways in which you can do that. The easiest and the fastest way is to submit an online application on the Internal Revenue Service website. Please note that issuance of EIN is a free service provided by the IRS. You are to duly fill the application form on their website and submit it. Please make sure that all the mandatory information is filled and that all information is true and valid. Wrong data or incomplete form can result in delays in the issuance of your EIN. Once you have submitted the application, it will be verified and you will be issued an EIN in the same session.
You can also apply for an EIN through fax. The procedure is to fill the form with requested information and fax it to the IRS office. If your form is complete and your data is matched, you will get your EIN faxed to you on the fax number conveyed to them by you. You can expect your EIN to be faxed to you in four working days from the time of application.
The application form can also be mailed to the IRS office for issuance of EIN. You will be required to fill a form and mail it to them and you will get the EIN in your mail after verification and approval. This process is relatively slow and can take up to four weeks.
International applicants can directly call the IRS office at 267-941-1099. Please note that this number is not toll-free and call charges will be applicable. You can call between 6:00 a.m. to 11:00 p.m. Eastern Time. Your call will be attended and addressed on all working days i.e. Monday through Friday. The person making the call to IRS must be authorized by the individual getting the EIN and should also have the necessary information required to fill the application form. Once the owner gets the EIN and signs it, the authority given to the middle-man automatically ends.