If you’re starting a new business, you may need to file Form SS-4, which is an Application for an Employer Identification Number (EIN). Your EIN is used as a unique identifier for your business when you file and report business taxes, so generally, every business owner needs one. In this blog, you will find out more about Form SS-4 and employer identification numbers, why you may need to complete the form, and how you can get an EIN for your business.
What is an EIN (Employer Identification Number)?
An employer identification number is a 9-digit number that is a unique identifier for your business, allowing you to report and file taxes under your business name. Your EIN is essentially a way for the IRS and other organizations to distinguish between your business and other businesses.
When individuals file taxes, they use their Social Security Number (SSN). When you file taxes for your business, you’ll use your EIN instead of your SSN. Think of an EIN as an SSN for your business. Most businesses have an EIN because the IRS needs to identify your business when you’re filing small business taxes. You may also need to provide your EIN when you’re filling out certain applications. For example, you may need to use your EIN when you apply for a small business loan.
How Do I Know If My Business Needs an EIN?
If you’re starting a business, you may need to complete an EIN application as part of your launch. But how do you know if your business is required to have one? If you meet any of the following criteria, you need an EIN:
- You have employees
- Your business is a corporation or partnership
- You file Employment, Excise, or Alcohol, Tobacco and Firearms taxes
- You withhold taxes paid on income (other than wages) paid to a non-resident alien
- You have a Keogh plan
You also need to have an EIN if you’re involved with these types of organizations:
- Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
- Estates
- Real estate mortgage investment conduits
- Non-profit organizations
- Farmers’ cooperatives
- Plan administrators
How to Apply Online for an EIN
You can easily apply for an EIN online through the IRS website. The IRS allows you to determine whether you’re eligible, fill out an online application, and submit that application to get your EIN immediately.
Keep in mind that there are limits when applying for an EIN online, and you’ll need to restart your application if you’re inactive for more than 15 minutes. You can visit the online EIN application page to learn more about the online application process.
Benefits of Applying for an EIN Online
Using online applications is one of our favorite tips for tax planning. Applying for an EIN online is a simpler alternative to completing a paper application, and you don’t have to worry about mailing in your application. As soon as you’re finished with your application, you’ll receive an EIN for your business if you fill everything outright. If you apply by mail, it can take more than a month to receive your EIN in the mail.
Applying online can also make it easier to keep all your information organized. You can keep important documents handy while you fill out your application. Whether you store everything locally or keep important documents on the cloud, you can access them during your online application.
The IRS uses a secure connection to encrypt and protect your data when you apply online. Where mail theft can be an issue when you mail in an application, you can rest assured that your sensitive data is protected when you apply through the IRS website.
Information Needed to Complete the Form SS-4
Before completing your Form SS-4 and applying for an EIN, you’ll need some information about yourself and your business. This includes the type of entity and principal activity of your business, as well as personal information about yourself.
Keep in mind that you’ll need to provide your SSN to complete a Form SS-4. If you can’t provide an SSN for some reason, you can also provide an Individual Taxpayer Identification Number (ITIN) to apply for an EIN for your business.
You’ll also need to provide the date your business was started or acquired, the projected number of employees in the next 12 months, and other details about your business. You also need to specify whether your expected employees will fall under the agricultural, household, or another category.
When you fill out your Form SS-4, you’ll be asked to check a box that describes the principal activity of your business. This is essentially what your business does. If you need help choosing the right category, a tax expert can help.
On the application, you also need to specify what type of business you’re applying for. Some options include sole proprietorship, partnership, corporation, and church or church-controlled organization. Make sure you select the right type of organization based on the type of business you have.
Near the end of the application, you’ll be asked if you’ve applied for and received an EIN in the past. If you have, make sure you have that previous EIN handy because you need to enter it on the application.
How to Prepare and Submit a Hard Copy Form SS-4
You also have the option to prepare a paper Form SS-4 and mail it to the IRS. However, most taxpayers find the online option much more convenient since you can receive your EIN immediately.
You may submit the paper Form SS-4 by fax or mail. For more information, see the Instructions for Form SS-4.
Under the Fax-TIN program, you can receive your EIN by fax generally within 4 business days. Complete and fax Form SS-4 to the IRS using the appropriate fax number listed in Where To File or Fax. Fax-TIN numbers can only be used to apply for an EIN. The numbers may change without notice. Fax-TIN is available 24 hours a day, 7 days a week. Be sure to provide your fax number so the IRS can fax the EIN back to you.
If you decide to apply by mail, make sure to complete Form SS-4 at least 4 to 5 weeks before you will need the EIN. Sign and date the application and mail it to the appropriate address listed in Where To File or Fax. You can call the IRS at 800-829-4933 to ask about the status of an application by mail.
If you make a mistake on your Form SS-4, you should send a letter to the IRS to let them know you need to correct your information. The IRS will give you instructions to correct any information that may be incorrect. In addition, you’ll need to complete Form 8822-B if you need to make any changes to your Form SS-4. It’s important to keep your SS-4 current.
If you require assistance with completing your Form SS-4 or have any other questions, TurboTax is here to help. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.
