Federal Tax Identification Numbers

You must have a taxpayer identification number so that the IRS can process your returns. The two most common kinds of taxpayer identification numbers are the social security number (SSN) and the employer identification number (EIN).

• An SSN is issued by the Social Security Administration (SSA) and is in the following format: 000-00-0000
• An EIN is issued by the IRS and is in the following format: 00-0000000

You must include your taxpayer identification number (SSN or EIN) on all returns or other documents you send to the IRS. You must also furnish your number to other persons who use your identification number on any returns or documents they send to the IRS. This includes returns or documents they file to report:

1. Interest, dividends, royalties, etc., paid to you,
2. Any amount paid to you as a dependent care provider, and
3. Certain other amounts paid to you that total $600 or more for the year.

If you do not furnish your identification number as required, you will be subject to penalties.

Employer Identification Number (EIN)

EINs are used to identify the tax accounts of employers, certain sole proprietors, corporations, partnerships, estates, trusts, and other entities.

If you don't already have an EIN, you need to get one if you:

1. Have employees,
2. Have a Keogh plan,
3. Operate your business as a corporation or partnership, or
4. File returns for:
   1. Employment taxes,
   2. Excise taxes, or
   3. Alcohol, tobacco, or firearms taxes.

How to get an EIN. You can get an EIN directly from the IRS either through the mail or by telephone. But first you must fill out Form SS-4, Application for Employer Identification Number.

Proper completion of the form is important as it indicates to the IRS what taxes you are responsible for filing and when. Assisting you in getting an EIN is included in our new business incorporation packages.

When to apply. You should apply for an EIN early enough to receive the number by the time you must file a return or statement or make a tax deposit. If you apply by telephone, you can get an EIN immediately. If you apply by mail, file Form SS-4 at least 4 to 5 weeks before you need an EIN.

If you do not receive your EIN by the time a return is due, file your return anyway. Write "Applied for" and the date you applied for the number in the space for the EIN.

Note that almost all banks require an EIN prior to opening a bank account.

More than one EIN. You should have only one EIN. If you have more than one EIN and are not sure which to use, contact the Internal Revenue Service Center where you file your return. Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. The IRS will tell you which number to use.

Contact us for more information on tax identification numbers (both federal and state). Almost all businesses require more than one type of number.

Related items:
    Income Tax Year
    Setup new corporations
    Small Business Services

© Copyright 2000 Raymond S. Kulzick. All rights reserved. 001029.