On your list of things to do when creating a business is to get a tax identification number or EIN. What is it, and when can you start using it? Keep reading to find the answers.
What is EIN?
EIN refers to the employer identification number on the file from the IRS to use for taxes and other business activities. You receive this number by making the request based on the type of business you have. As you may have guessed, the identification is a must-have if you want your business to work legally.
An EIN is not just reserved for businesses. For example, you can also acquire an IRS tax ID if you are the legal representative of an estate.
Whatever the purpose, you may be wondering how long you will be able to use your federal tax identification number after requesting it.
How fast will you receive your EIN?
If you think you will receive your EIN in weeks, think again; In the digital world today, you can apply quickly and easily online. This means that it only takes a few minutes to complete the process.
You will get your number within hours of the end of the application, if not earlier. If you have applied late at night, you may have to wait until the next morning to receive your EIN.
Of course, you can use conventional methods, supposedly much slower, like fax or mail. But it takes days or weeks.
When can you start using your tax identification number?
The good news is that you can start using your number immediately for most business needs, including:
- Opening of a financial account
- Application for Credit Card or Loan
- Obtaining Licenses and Permits
- Hiring Employees
- Sending a paper income tax return
However, since it takes two weeks for the IRS to add your EIN to its permanent records, some transactions are not available immediately. For example, you can not file your taxes online or make tax payments electronically until the IRS sends you official documents, which may take up to a few days. to a month.
Still, you can start taking on the day-to-day responsibilities of running a business as soon as you have your tax identification number. How is it for
How to begin
There are two ways to start with the application process: Apply via the IRS website or a third-party service provider for quick results.
Due to the complexity of the process, it is recommended to use a third-party service provider, such as IRS EIN Tax ID Filing Service. Contact the company if you are unsure about which business entity to apply for.