EIN & ITIN
If you are an entrepreneur or foreign investor who is starting a new business, there are two critical tasks waiting for you: incorporation of your business and obtaining an Employer ID Number which is called an EIN.
Incorporation is a legal process for each business owner must go through. After going through this legal process, you will have your business structure. Such business structures may include a Limited Liability Company (LLC), S corporation, C corporation, non-profit and cooperative.
There are some steps to be taken in order to incorporate your business. These steps are as follows respectively: filing Articles of Incorporation, describing bylaws and paying registration or other fees depending on where you are incorporating.
An EIN – also called an Employer Identification Number or Federal Employer Identification Number (FEIN) – is a nine-digit tax identification number required for U.S. businesses for tax and reporting purposes. You may imagine that EINs are like social security numbers (SSN) for your business.
A business needs an EIN in order to hire employees, opening a bank account, complying with taxes. Once you get your EIN, it will be unique to your business assigned by the Internal Revenue Service (IRS) and they never expire. An EIN is required for several reasons:
Incorporation is required for all businesses before applying for an Employer ID Number. Getting an EIN for your LLC after the state approves your LLC is the best way. This is because you want to ensure your LLC name is accepted before “attaching” an EIN to it.
Apart from this, during the EIN online application on the IRS’s website, entering your business information such as “date of formation” is required. So, this information will naturally be verified after your LLC has been established.
The fact of the matter is that you may also obtain your EIN before incorporation. However, if your business name gets rejected by the IRS, you will need to re-file with a different name. In this case, your first EIN will be attached to the wrong business name.
To obtain an Employer Identification Number (EIN), filling out Form SS-4 is required. It is a one-page long-form and essential during filing your EIN application. The required information asked in the Form SS-4 includes:
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