When starting a new business, there is a lot of paperwork and filing that you have to do to make sure that your company is recognized in the eyes of the law and the government. As far as documentation goes, one of the first thing you should do is get an EIN number, as this will create your business through the IRS, allowing you to file taxes as well as do a lot of other things. If you’re new to the concept of getting an Employer ID Number, then let’s go over when to use an EIN and why it’s important.
How Do I Get an EIN?
The process for obtaining this number from the IRS is relatively simple. You fill out the necessary paperwork and submit it either via fax, through the mail, or online. We highly suggest going the online route because it is much faster than waiting for your mail carrier, and you can check your EIN status within hours. In fact, in many cases, you can receive your ID within a few hours by submitting online. You can also get your EIN over the phone after the IRS has processed your paperwork.
When Do I Use my EIN?
There are three primary situations where having an EIN is imperative. That is when you are filing taxes, opening a bank account, and applying for business licenses in your area. Another reason to have an EIN right away is that if you have any employees or plan to have any shortly, you will need your ID number to ensure that all of their paperwork is filed correctly and that you will pay the requisite taxes for those employees.
In the end, having an EIN is a crucial part of starting a new business as it will enable you to do everything you need to get up and running. So be sure to apply ASAP, so you don’t run into any obstacles on the way.