Federal Tax ID Numbers Basics

Acquire a federal ID number to get your business started
By Mike Tracy The IRS uses the federal tax ID number, or employer identification number, to identify your business. Your business needs a federal ID number if it has employees, is a corporation or partnership, files special tax returns, withholds taxes from non-residents, provides a Keogh retirement plan or works with certain trusts, non-profits or farmers cooperatives, your business will need a federal tax ID.
 

Getting a tax ID number is a relatively easy process. Simply learn the federal tax ID numbers basics, collect your documentation, and then follow the steps for acquiring federal tax ID numbers at the IRS website. If you have any questions about whether or not your business needs to apply, be sure to contact the IRS directly. As you prepare to apply for federal tax ID numbers for your company, take the following steps:

1. Review the IRS Information to determine whether your business needs tax ID numbers.

2. Investigate the steps for getting a federal tax ID number.

3. Submit an application for an employer identification number (EIN).

Check the qualifications for a federal identification number

Remember that your business might not have to obtain a federal tax ID number, so check the requirements. Internal Revenue regulations regarding which businesses do and don't need one are quite specific. The parameters are listed in a chart. Your business needs a federal identification number if any items on the chart apply. For a more detailed explanation, download the pdf "Understanding Your EIN." If your recently acquired your business, be sure to check whether you need a new EIN.
Try: See the "Do You Need an EIN" section at the IRS website for the basic rules and read the information in "Do You Need a New EIN" to determine whether your business needs to reapply. If you'd like help with the process, several businesses such as FederalTaxId will assist you for a small fee.

Identify the methods for obtaining a federal tax ID

Your company can acquire federal tax ID numbers in a several ways. The Internet EIN application is the IRS preferred method. You also can apply through a toll-free telephone number, fax or mail. In all cases, finalize Form SS-4's Third Party Designee section before submitting your application.
Try: Access "How to Apply for an EIN" at the IRS website. For companies classified as International Businesses, study the additional regulations also at the IRS site. You can also go through the International Chamber of E-Commerce.

Secure your federal ID number

Once you've determined that your business needs an employer identification number and you've reviewed the options for getting one, it's time to apply. Call the IRS Business & Specialty Tax Line at (800)829-4933 to apply by phone or for any questions. (Note that international applicants must call (215) 516-6999, which is not a toll-free number).
Try: For immediate service, apply online with the IRS. Follow the simple steps to provide and verify information, and receive your EIN. If you'd rather apply by mail or fax, print and fill out Form SS-4 and the Application for Employer Identification Number and send them off. Be sure to check "Where to File" for the correct address. BusinessNameUSA.com will apply for your federal ID and any other documents your business needs.

• Conduct a tax ID search to find tax ID number information. This allows you to discover if a business has a federal tax ID number or verify one. If you recently acquired your firm, this might be your first step.
• One other aspect of federal tax ID numbers basics is to check IRS rules and recommendations about getting a new federal ID number for an existing business. In general, unless there has been a major change in the business, it will keep the same number.
• You can check the status of your faxed or mailed federal tax ID application by calling (800) 829-4933.