Whether you want to get your business permit or you want to open a bank account, you will notice one recurring requirement – business tax ID number or commonly called EIN (Employer Identification Number). IRS uses EIN to identify your business. With this, it is needed on all your tax documents and forms.
The good news is IRS makes online federal tax id application a breeze. To give you an idea, here’s an overview of applying business tax ID online:
You have to go to the IRS website and then click on the “EIN Assistant” page then at the bottom locate the “Begin Application”. Do not forget to click the button to get started.
The next step is to identify the tax structure of your business or your entity. If you have a corporation, click on the “Corporations” button. After choosing your business entity, you need to click on the “Continue” button.
Following your business entity, you will be asked to state the reason why you are requesting an EIN. The most common reason is starting a new business. If you are starting a new business, click on the “Started a New Business” button. Do not forget to click on the “Continue” button.
This is when you have to designate a contact person or who will be called the “Responsible Party”. This is important when the IRS sends letters. After designating a contact person, do not forget to click on the “Continue” button.
You will be asked to provide a business location. The address should be a US address and it may not be a PO box. When it comes to the business location, you should remember that the IRS only allows 35 characters. If your address is more than 35 characters, at least provide essential information. You need to click on the “Continue” button.
The next step is you provide legal and trade name information about the business. Aside from this, you will be prompted to give other information like the country and state of your business, where the articles of organization are filed and the start date. Do not forget to click on the “Continue” button.
This is when you will be asked a series of questions that cover vehicles, excise tax returns, gambling, tobacco, alcohol, and firearms. In most cases, the answer will be “no”. You need to click on the “Continue” button.
The next thing to do is to choose a category that best describes the nature of your business. If you are not sure what category you belong to, you can click for further explanation. If none of the given categories fit your business, you can click on “Other” and then “Continue”.
This is the stage where you should state how you want to receive your confirmation letter – either online or by mail. If you receive it online, you can view the letter right away and it will not be emailed to you.
Now you verify your information. Make sure that the information is correct before you click “Submit” to receive your EIN.