If you have a business, a tax-exempt organization, or other entities in the US, the first step is to prepare for the tax season. The first step for tax season is to get a Federal Employer Identification Number (FEIN) or EIN for tax operations or other operations.
The IRS EIN Assistant tool is the easiest and fastest way to apply for the FEIN and obtain it online or via mail. You can find all the information you need to prepare for the EIN application and get it right away.
How to Apply for FEIN Online?
The nine-digit EIN helps the IRS identify businesses or other entities, which comes with numerous benefits apart from tax purposes. Seeing the importance of the FEIN, the IRS has an online tool to file for an EIN without paying any fee.
For an EIN application, you can follow the following steps and obtain a tax ID number for your entity in a single day:
- First, collect the documents needed for the FEIN application, such as the business name, responsible party information, and other details.
- Go to the IRS EIN assistant website and carefully follow the directions.
- Next, continue the application and select the type of your business entity.
- Next, enter your entity details, business name, address, owner information, and others.
- Next, enter the responsible party information, their name, SSN, etc.
- After that, review your entries in the FEIN application form and submit it.
Afterwards, the IRS will validate your information based on your company registartion and other details, and if everything seems fine, they will approve the application and issue the FEIN confirmation letter on the same day.
Important Note:
- If you are a foreign applicant applying for the FEIN for your business in the US, you cannot use the online tool, EIN Assistant, for the application; you can only apply through Mail or Fax.
Who will need the FEIN?
As per IRS guidelines, you will need a FEIN to operate and manage the following entities:
- Limited Liability Company
- Corporation
- Partnership
- Estate
- Farmer’s Cooperative
- Tax-exempt Organization
- Trust
- Real Estate Mortgage Investment Conduit
- Retirement Plan or IRA
You will need the FEIN if you need to hire employees, withhold taxes on wages, income, or net earnings to pay for employment, pay excise duties, alcohol, firearms, or tobacco taxes. When your ownership or company structure changes, you must also get the tax ID number (EIN).
Even if you don’t have any federal or state tax purposes, the tax ID number will help you in opening a bank account or other operations.
What do you need to do before applying for FEIN?
If you are applying for the FEIN, you should prepare for the application and know the following rules:
- If you are applying for the LLC, corporation, partnership, tax-exempt organizations, or other you must register the organization legally with the state authority.
- If you are applying for a tax-exempt organization, remember that you should wait until your organization is legally formed.
- If you are applying to FEIN for a political organization, you must file Form 8871 within 24 hours of creating your organization.
- You should know the business name rules when you are applying for the FEIN, such as the business name should only have numbers (0-9), letters, ampersands (&), and hyphens (-), and keep in mind that only 35 characters are allowed.
When can you start using your FEIN?
If you got the IRS approval for the FEIN when you applied online, you can get the EIN the same day; however, you should know when you can use your tax ID for business operations. According to the IRS, you can use your FEIN for the following business needs immediately:
- Business Licence application
- Filing a tax return through the mail
- Establishing the entity’s credit card or bank account
However, you have to wait for 2 weeks to take the following business action after your EIN is issued:
- E-file return
- Tax Deposits and paying them electronically
- To pass the TIN (Taxpayer ID number) matching program, which helps you to verify your TINS before submitting forms like W-2 and Forms 109,9 and reduces the chances of errors.
If your tax return is due and you haven’t received your FEIN, you can mention “Applied For” in the form with the date of application.
The IRS online tool for FEIN enables you to get your tax ID in a single day for your business or entity’s basic operation, so if you need it, remember to apply for it carefully with all the documents required for the tax ID based on the type of business.
