Budget to obtain an EIN: How much will it set you back?
Starting a new business involves various administrative tasks, and obtain an EIN is one of them. An EIN, also known as a Federal Tax Identification Number, is essential for tax purposes, hiring employees, opening a business bank account, and more. Yet, if you’re a sole proprietor juggling all the hats, there’s a silver lining – your trusty social security number might just step in to do the trick!
While an EIN may not be required in all cases, there are several instances where one is necessary. For example, suppose you plan on paying salaries to employees. In that case, you’ll need an EIN to report and pay taxes on those wages properly. Similarly, if you need to open a business bank account, most banks will require an EIN for identification purposes.
In some cases, an EIN may also be required if you have a tax return filing requirement as a foreign-owned U.S. corporation. Additionally, if you’re purchasing a new business, you’ll need an EIN to transfer ownership and handle any tax implications properly.
While it may not be required in all cases, it’s always a good idea to consider applying for an EIN to ensure that you have all of your bases covered.
What is the cost of applying for an EIN?
Obtaining your business’s EIN or employer identification number doesn’t have to break the bank. The cost to obtain an EIN will depend on whether you apply yourself, work with a tax professional or a business consultant. While the process is free, a professional may charge a fee for the service.
How to apply for an EIN?
Are you ready to start a business but need help to obtain an EIN or employer identification number? Don’t worry; the process is relatively simple and can be completed in just a few steps.
Determine your eligibility: Before applying for an EIN, you’ll need to ensure you meet the necessary criteria. It may include having a valid social security number, individual taxpayer identification number (ITIN), and a valid reason for obtaining an EIN – such as hiring employees or incorporating your business.
Choose your application method: There are several options for applying for an EIN, including online, by fax, or by mail. If you’re located in the U.S., online is the fastest and most convenient option. This process typically takes a few minutes, and you’ll receive your EIN immediately. To submit your application by fax or by mail, you must first complete the EIN application form, known as Form SS-4.
Gather necessary documentation: Before beginning the application process, it’s crucial to have all the essential information. It may include your business’s name, address, type of business entity, and personal information.
Complete the application: Once you have the necessary information, you can begin the application process. Depending on your chosen application method, you’ll either need to complete an online form, fax a completed form, or mail in a completed form. Be sure to double-check all of your information before submitting your application to ensure everything runs smoothly.
Wait for your EIN: After you’ve completed the application process, you’ll need to wait for your EIN to be issued. If you apply online, you’ll receive your EIN immediately. It may take a few weeks to receive your EIN if you apply by fax or mail.
These straightforward steps can efficiently help you obtain an EIN also ensure that your business is correctly set up and in accordance with all necessary tax requirements.
How long does it take to obtain an EIN?
How long will it take for your business to get an EIN or employer identification number? The process can vary depending on your location and how you choose to apply.
If you’re in the United States, applying online is the fastest way to obtain an EIN. This process typically takes a few minutes, and you’ll receive your EIN immediately. However, suppose you’re located outside of the U.S. or U.S. possessions or applying on behalf of a U.S. LLC. In that case, you’ll need to call the IRS directly to apply for your EIN.
If you choose to mail in your EIN request form, it’s important to note that the process can take longer. The IRS estimates it will take about four weeks to receive a response after submitting your form by mail. However, it may take even longer to receive your EIN due to backlogs in processing times.
In general, the timeframe to obtain an EIN depends upon both your geographical location and the application method you opt for. If you’re located within the U.S. and apply online, you can expect to receive your EIN almost instantly. However, the process may take longer if you’re located outside of the U.S. or apply by mail.
Obtain an EIN – Where to get help?
While obtaining one is typically free if you handle it yourself, a tax professional can also assist with the process for a nominal fee. If you happen to misplace your EIN information, you can request an EIN confirmation letter, known as a 147c letter, to verify your number.
If you need help to obtain an EIN or any other tax-related matters, don’t hesitate to contact H&S Accounting & Tax Services. We have the expertise to guide you through the process with utmost smoothness and help your company set up flawlessly while adhering to all pertinent tax regulations diligently.
