The employer identification
number (EIN) has many uses. Whereas the
IRS identifies individual
people by social security numbers, it identifies every other type of legal
entity by an EIN. Thus, the EIN can be a
trust Tax ID or a Tax ID for a business, nonprofit
organization, or church. No matter what
type of entity you choose, though, the EIN application process is the same.
How the EIN Application Process Works
All you have to do to get
an EIN is fill out an application form. You
can find the application forms online, such as on the IRS-EIN website. When you submit the form online, IRS-EIN will
send you a confirmation by email. The
email confirmation will contain your EIN.
Therefore, you can then open a bank account for your business or apply
for business insurance, filling out forms that require you to enter your
EIN. Your official confirmation from the
IRS will arrive by mail within a month of when you submit the email
confirmation.
Choosing Your Entity Type
The application form to get
an EIN is quite short, but one question asks you to specify your entity
type. The IRS-EIN website contains brief
descriptions of each type of entity.
Some of them are very straightforward.
If you are establishing a church or if you are the executor of an
estate, you will know it immediately.
When it comes to business entity types, there is a little bit more
flexibility. Consult with a corporate
lawyer if you are opening a business and you want to know which entity type
will make it the easiest for your business to operate.
The types of entities that
use EINs to file taxes are very diverse.
All of them can apply for their EINs through the same simple process.
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