The Easiest Way to Get a Tax ID Number for Your Small Business

If you have recently started your own business or are thinking about taking this step, you’re likely wondering how to get a federal tax ID number. Like a Social Security number for individuals, your employer identification number (EIN) identifies your business with the IRS for tax purposes.

Who Needs a Federal Tax ID Number?

Not all businesses are required to file for an EIN. If you are a sole proprietor or have a limited liability company (LLC) with no employees, you do not need to have an EIN and can instead file taxes with your Social Security number. The exception is if you are a sole proprietor and are required to file pension or excise tax returns.

• Pension returns are submitted for the taxable income of any personal pension derived from business income.
• Excise tax returns are required if you sell goods that are subject to federal or state excise tax. These vary by jurisdiction but typically include gasoline, cigarettes, alcohol, and gambling products.

Besides sole proprietorships and LLCs without employees, all other businesses must obtain a federal tax ID. This includes partnerships that do not have employees. Even if your business is not legally required to use an EIN, however, you can still obtain one to use for opening bank accounts and lines of credit for your company.

What Are the Steps to Obtain an EIN?

First, fill out a tax ID number application. This can be done online provided you already have a valid EIN, Social Security number, or Individual Taxpayer Identification Number (ITIN) if you are a foreign national. No fee is associated with this service.

The application will ask you to provide information about your business, including the type of entity, the business address, the name of the responsible party, the reason for your application, the number of employees, and your principal business activities.

If you need help determining whether you need an EIN for your small business, govdocfiling.com can assist. You’ll find information about forming your legal business entity and ensuring that you meet associated IRS obligations.