Reasons Why You Would Need an EIN & Tax ID Number

Tax ID filing service is a convenient way of securing EIN & Tax ID Number. There are many important reasons why you should get these numbers.

Before anything else, we should first clarify that the Employer Identification Number (EIN), the Taxpayer Identification Number (TIN), the Federal Tax Identification Number, the Federal Tax ID, the FEIN and also the “95 number” all refer to the same unique nine-digit number that the IRS gives out in order to identify an organization, particularly for tax concerns.

It’s like an SSN but it’s for an organization, not a person.

Why EIN? 

An organization is required to have an EIN if it has employees; if it is part of a partnership, a corporation, or an LLC is taxed as a partnership or a corporation; if it files employment, excise or alcohol tobacco and firearms tax; if it has a Keogh plan; or if it’s involved with certain types of trusts, estates, real estate mortgage investment conduits, nonprofits, cooperatives or plan administrators.

In fact, you need an EIN even if it’s just to declare to the IRS that you should not be made to pay taxes.

The only entity that is exempt from getting an EIN is a sole proprietorship with zero employees, where you do not file any kind of excise or pension tax returns. For this, you can use your SSN for transactions.

Even if the IRS says you’re not required to have an EIN, it would be best to acquire one. You need an EIN to open a bank account; and also to obtain a business credit card, business licenses or building permits; or to issue 1099 forms to independent contractors.

Seeking Help 

For new businesses that have yet to learn the ropes when it comes to filing taxes, there is always an alternative. Tax ID filing service like the one being provided by GovDocFiling helps you navigate the government forms you have to accomplish to start a business.

The services are specific and they post their prices up front.