Website Screenshots by PagePeeker Does Your Business Need an Employer Identification Number? – Heres The Answers

Does Your Business Need an Employer Identification Number?

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If you have a business and you have employees, then you need a Federal Employer Identification Number, or EIN. Basically, it is a number that the Internal Revenue Service uses to identify your business.

Your EIN is a nine-digit number that the IRS assigns to identify tax accounts of employers. The EIN is not a substitute for your social security number, and it's important that the business owner use the EIN, not their social security number when dealing with the IRS.

How do you know whenever you need an EIN? If you answer yes to any of the following questions, you need one:

— Do you have employees?
— Is your business incorporated?
— Do you file tax returns for the following: Employment, Excise, Alcohol Tobacco and Firearms?
— Have you filed for bankruptcy under Chapter 7?
— Are you forming a pension, profit sharing or retirement plan?
— Do you have a Keogh plan (A Keogh plan is aa tax-deferred pension plan for employees)?
— Is your business involved with the following: 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.

— Are you a new corporation?

— Did you recently purchase or inherit an existing business?

However, you do not need an EIN if you are simply changing the name of your business or moving.

If you are forming a corporation, getting a EIN should be a priority, because you will not be able to make a deposit or file a tax return until you have one in hand. It takes about two to four weeks to get an EIN, so it's important to plan ahead.

If you do have any questions about whether your business requires a EIN, the IRS can answer most questions. Also, several online incorporation business can handle all the paperwork involved in setting up a new business, including filing for an EIN.

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Source by Roberto Neuberger

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