Are you running your own business and wondering how you can make sure that you are on the IRS’s good side come tax season? While there are several factors that go into your business’s standing with the government, one of the most important and easiest to remedy is ensuring that you have your employer identification number (EIN), also known as a federal employer identification number (FEIN), and can accurately supply it while you are filing your taxes. Let’s look at how you can apply for a California FEIN and check EIN status once you have opened an application.
Is the FEIN public?
It is well known that almost every other entity use their FEIN to report the other financial information and their taxes to the different government entities and the IRS. Indeed, it is public information. The corporations are required to share their FEIN with the various other businesses they are accounted with. If you see, the FEIN is always needed for completing the W-9 forms. Thus, it proves the credit references and also shares other forms of information as well. Indeed, it would opt to be wrong to say that sharing the FEIN may create unwanted exposure and, thus, a considerable level of vulnerability. The FEIN is considered just like the social security numbers and is shared and used discreetly to reduce the risk of identity fraud and theft in the future.
Who needs a FEIN?
Do all the businesses requires FEIN in the first place? Indeed, that may not be the case! A small business entity may require FEIN or may not. It depends on different factors. Here are the small business units which may require a FEIN-
- Any of the business which has employees
- Any of the businesses that are operating as a corporation or a partnership
- Any of the laid businesses that pay alcohol, tobacco, firearms tax returns, and employment.
With that, you may also want to know about the businesses which typically may not require the need for a FEIN. Here is the list that follows for you-
- If you are operating as a sole proprietor, you may not require a FEIN.
- If your small-scale unit does not have employees, you do not need a FEIN.
- Those who are not required to pay the taxes indicated in the above stance are required to have FEIN.
What can be done if you are not sure whether or not you need a FEIN?
In case you are not sure of the validity of the FEIN for your requirements, you can always consult the Internal Revenue Service’s website at IRS.gov/businesses/small. In this regard, a good thumb rule that can be stated to be functional for you is, “If you are recording them on your personal tax returns, you are not required to have one, and you can use your social security number.” If you have to or willing to report them on a business tax return, you are mist to have the FEIN. Indeed, it can be confusing for many of us here. In this case, you can hire an independent online payroll processor to help you with the different processing and effectively reporting the payroll-related taxes.
Benefits for having FEIN
Having a FEIN FOR California LLC enables you to have the following benefits-
- You are allowed to open an LLC business bank account
- You are allowed to file different taxes at the state, federal, and local levels.
- If applicable, you can also handle the aspect of employee payroll.
- You are now allowed to obtain business loans or business lines of credit
- You can opt to get a business credit card for your firm
- Now, you are allowed to apply for business licenses.
Note that applying for FEIN for California LLC is free! That is, it comes in $0. The IRS does not charge any money for any of the processes for applying for the EIN.
The Application Process
Applying for a federal tax ID is not necessarily a difficult process. It sounds intimidating, of course, but all you really have to do is to find a trusted website that can help you get through the application process as quickly and easily as possible. Applying online has a number of advantages over applying for an EIN number via snail mail. For one thing, you can easily check EIN status once you have submitted the application. For another, you will typically receive your number faster when you apply online as you do not have to wait for the mail to reach the IRS’s office and then be returned to you.
FEIN Responsible Party
Who is an EIN Responsible Party? Indeed, this is a common term that you may hear over time in this domain. Right?
The EIN Responsible Party is known as being a person who is responsible for going over the files through the IRS when you apply for an EIN for your California LLC. You can think of the Responsible Party as the LLC’S direct contact person. The IRS would be sending your LLC’S correspondence and mail to this person. In case you are a single member of California LLC, then automatically, you will be considered as EIN Responsible Party.
How is California LLC taxed?
Contextually, putting this information straight, California LLC is taxed based on the number of members or rather the owners! That means an LLC is just taxed in the default status set by the IRS. You will find that the LLC does not opt to have their taxes calculated as any of the corporations. It is neither taxed in s-corporation or c-corporation.
How do I apply?
Once you find the website that suits your needs, make sure that you have important identification documents and numbers, like your social security number, on hand. Complete the online application process, and then watch your email for more information about the status of your number. Sometimes you can receive your EIN number as quickly as the same business day that you have completed your application!
How to cancel your EIN?
If you want to cancel the first application of your EIN, or you want to cancel your EIN number for any of the reasons, it is possible! You just have to mail a cancellation letter to the IRS.
The bottom line
For a well-established and trusted website that helps you move through the EIN application process, give IRS-EIN-Tax-ID.com a shot! They offer a quick and accurate service to suit your needs.
