In This Article, We Are Going To Learn What Is An EIN? What Should You Know About the Employer Identification Number?
The Employer Identification Number is something so ingrained in our daily life that we assume in some way or another that we know everything about it. But is it so? For example, do you know if TIN and EIN are precisely the same? Do you know how the assignment of an EIN is made to legal entities? And what happens with the EIN of the self-employed?
All of these questions have probably cast the shadow of a doubt. It is normal, do not worry: doubting is wise. And, in this case, doubting is only the beginning for us to dive into an in-depth article on what is an EIN. We will cover everything you need to know about the identification number procedure (and its possible ramifications).
What Is An EIN?
Let’s start with the only possible principle, which cannot be other than the definition of the concept. EIN stands for Employer Identification Number. With these three acronyms, we refer, fundamentally, to the code used to identify employers for tax purposes. It is a mandatory code for a business entity in any action of a tax nature. The employer uses it for tax purposes.
We are talking, after all, about a kind of guarantee when doing business. Think about it: the EIN is an official code endorsed by the State and linked to a registered office (IRS). Therefore, it can be traced to verify its authenticity and, consequently, to know if the person with whom we are going to do business is legitimate.
Is the EIN the Same as The TIN and the SSN?
Yes … But with specific nuances.
The TIN or Taxpayer ID Number is a unique code assigned to taxpayer citizens. The IRS issues TIN. The EIN and SSN are two different types of TIN provided by IRS and SSA, respectively.
The SSN (Social Security Number) is the reference document for natural persons with American nationality. They can be permanent or temporary residents. It is a nine-digit number provided by the US Government.
Whereas, EIN can be described as the SSN for the business person. It is also a nine-digit code issued by the IRS. The EIN helps to identify the entity or person doing business. EIN is also called the FEIN (Federal Employer Identification Number) or FTIN (Federal Tax Identification Number).
When is the EIN Used?
The EIN is used to identify a business entity or person when carrying out any procedure that has tax relevance. This is why every professional or entrepreneur must state it in the invoices and the supporting documents generated during its fiscal year.
That is the basis. But there are also other cases in which you will need to use the Employer Identification Number:
- If you have several employees
- IF your company or business is in a partnership, LLC or corporation
- Deeds or documents for the constitution, transmission or extinction of real rights over real estate
- In the case of withholding taxes
- Business Bank account
- License or permit of business
- Insurance or financial operations of insurance entities
- Contributions to pension plans or perceptions of those same plans
To Know More About What Is EIN Watch This Video
Read This Also: 4 Tips on Planning For Your New Zealand Trip
How to Get an EIN?
The EIN of legal persons must be requested from the IRS. It is, therefore, a necessary step in which we consider creating a company. You can apply for your EIN by FAX, mail, online. If you are out of the country, you can do it by phone. Before applying, you should print the SS-4 form from the IRS.
If you are applying online, try to do it in one sitting as there is no saving option. Also, you will need your ID to apply.
When applying via fax, complete the SS-4 carefully and send it. You will get your EIN via fax. It will take almost four days to get the EIN.
When you apply via mail, it takes almost four weeks. The procedure is the same: Send the form in the mail.
In case of applying through phone, call at (800) 829-4933. The timeframe is from Monday to Friday from 7 AM to 10 PM (local time). If you are an international applicant, call at (215) 516-6999. Authorized personnel will ask some questions and give you the EIN.
Read This: Top 10 Garments Buying House in Bangladesh
What to Do If You Forget Your EIN?
Very often than not, you can find yourself in a situation where you need your EIN, but you can’t remember. In that case, you can find it in the following three documents:
- Your business tax return of the previous year
- The document provided by the IRS while applying for EIN
- If you registered with the State, check the State’s business website.
We Had Describe What Is An Ein In Detail In This Article