When is an EIN Required?
Mostly, EIN is necessary for business entities, but not every business. Any business entity that fulfills the following criteria must have an EIN:
- Run as a partnership
- A business can hires employees
- Having this enables a retirement plan
- Administers trusts
- Files taxes for employment to the IRS
- Taxes for payments to non-resident aliens
- EIN has involvement with non-profit administrators and cooperatives
How to Get an EIN?
Any entity may apply for an EIN through the Internal Revenue Service Website. However, the process is simple and may take a few minutes to complete the whole process. For the online application, you need to give some basic information about your business.
In case, you apply for EIN online Monday through Friday, local time, you may receive your EIN lookup California within minutes. Also, you can fill out Form SS-4 by fax or mail.
The only problem that you might face while using fax or mail. Is that you may take much longer than online applications. For example. You may get your EIN within three days if you send a fax.
However, for any entity to obtain an EIN, its sole proprietorship must be physically present in the United States. Also, you must have your own tax identification number (Social Security Number). Read more Blogs: Mr Guest posting
The Benefits of Getting an EIN
There are some reasons why you may need to apply for an EIN for your sole proprietorship. These reasons may include:
It helps establish you as a professional business
Having an EIN is a sign that you are a professional businessman. It is not just someone running a side hustle out of your home. EIN helps an entity to apply for a loan and attract customers and partners. Hence, it should be taken seriously.
It helps you track business expenses
In case, you need a track your business expenses. You may use your EIN to track your personal expenses. As a result, this helps you save your precious time and money.
Moreover, you can keep tracking your business expenses. So, you will be able to take advantage of tax deductions and may save more money.
It helps minimize the risk of identity theft
Your SSN holds one of the most important pieces of information about you. In case, you lose it this will leave you vulnerable to identity theft.
Furthermore, these identity thieves may get hold of your personal SSN. Some may use it to file tax returns. By having an EIN, you may keep your SSN for personal use and also have a unique identifier number for your business.
It makes it easier to hire employees
If you are planning to hire employees for your business in the future. Having an EIN will make your process much simpler. Also, you don’t need to provide your SSN on new employee paperwork.
For that, you need to have a dedicated account for payroll taxes. Moreover, an EIN may allow you to hold employee taxes and contribute to social security and Medicare.