Guide To Understanding EIN

A Complete Guide To Understanding EIN

ByWITS ZEN Editor's Desk

If you are like most people, you have probably heard of or have seen an EIN without even realizing it. EINs are extremely important for any business, especially during tax time, so knowing what your business’s EIN is or how to look up EIN is information you need to know.

Luckily, we’ve made getting this information easy for you so you don’t have to stress when it comes to trying to figure out your EIN and what it means for your business.

Check out the complete guide below on everything you need to know to understand your EIN and how it works.

What Is An EIN?

The first thing that needs to be addressed is what exactly does EIN mean. The abbreviation for EIN is employer identification number and is sometimes also referred to as a federal tax number by the IRS.

This is a specifically created single set of numbers by the IRS to properly identify your business. Think of it as similar to a social security number where this number will help identify you, and by you, we mean your business.

All businesses have an EIN because it is a legal requirement. So whether you are just starting a business or have an existing one, you too will have an EIN.

If you are just starting your business, you may not know what yours is, but you can look it up if you don’t know or have even forgotten it. Check out the next section on how to look up your EIN.

How To Find Yours

If you have a new small business just starting or an existing business that may have forgotten your EIN, fear not, because you can always look it up.

Once you do, however, it’s always recommended that you keep a record of it somewhere like a safety box or somewhere where you keep all your business’s tax information. That way, you will know you have it on hand and can refer to it whenever you need it.

However, to look up your EIN, you can do it one of the following ways:

. Documents – one place to look first is your previous year’s tax returns or other paperwork such as permits, loan applications, and any tax-related documents for the IRS you have received in past years

. Contact the IRS – if you can’t find any evidence of your EIN on previous tax year’s documents or are a brand new business, you can always call the IRS Business & Specialty Tax Line number at 800-829-4933

With those two options at your fingertips, you should have no issues finding your EIN, even if you just started your new business and can’t remember or are not sure how to locate it on your tax documents.

However, if you are a new business that doesn’t have an EIN created yet, you will need to apply for one. Read on to learn how.

How To Apply For An EIN

If your business has yet to apply for an EIN, you will need to do so as soon as possible. Since it is a legal requirement for all businesses to have an EIN, it’s better to apply for one sooner rather than later, especially before tax season rolls around. If you aren’t sure if you need an EIN, consider the following criteria the IRS uses to decide if a business needs an EIN:

  • Your business has paid employees
  • Your business operates either as a corporation and or a partnership
  • Your business files either Tobacco and Firearms, Alcohol, Employment, and or Excise taxes
  • Your business withholds taxes on income, other than wages, which are paid to a non-resident alien
  • Your business has a Keogh plan

If your business falls into any of these criteria, you will need to apply for an EIN. To apply for an EIN, you can do so any of the following methods:

  • Online – by far the easiest method, you can apply for an EIN directly on the IRS website
  • Fax – you can also fax your paper application, which can be found as the Form SS-4 on the IRS website, to the appropriate IRS fax number as well
  • Mail – although this process can take weeks to get accepted, you can also fill out the Form SS-4 application and mail it to the appropriate IRS mailing address, too

Do EINs Expire

Fortunately for your business, your EIN will never change or expire. So, for example, if you started a business long ago and put it on pause and now want to revive it, you can simply use your original EIN that was issued when you initially began the business instead of applying for a new one. Also, the IRS can and will not ever cancel an EIN, so once one is created for your business, you will have it indefinitely.

Start Figuring Out Your EIN Today

Now that you know all there is to know about your business’s EIN, be sure you start looking up or applying for yours today.

Don’t wait until the last minute, especially around tax time, because it will make it that much harder to find and could potentially get in the way of your filing for the tax year. And now, as we say, is always the best time to do it.

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