Quickbooks point of sale change license number
An Employer Identification Number (EIN) — also called a Federal Tax Identification Number — is how the IRS identifies your company. Business owners use their EINs to conduct activities that would otherwise require a Social Security number.
Many entrepreneurs have questions about EINs and whether or not they need one. So we thought we’d provide a few answers.
1. Who Needs an EIN?
According to the IRS, your business must have an EIN if any of these criteria apply:
Beyond filing taxes, you may also need an EIN to:
- Open a bank account in the name of your business;
- Apply for a credit card in the name of your business;
- Apply for business permits; or
Another reason you may want an EIN: privacy. For example, if you are a contractor who works with a large number of clients, disclosing your Social Security Number may expose you to personal identity theft. Instead, apply for and provide an EIN. This won’t eliminate your chances of falling victim to identity theft, of course, but it will likely keep the thief from accessing your personal accounts.
2. How Do I Apply for One?
Don’t be fooled by online services that charge you to apply for an EIN: The IRS allows you to do so for free on its website, where it devotes an entire page to EIN application procedures.
The process is fast and easy; very few applicants will need expert help. Just complete online form. In most cases, if you apply Monday through Friday between 7 a.m. and 10 p.m. local time, you will receive your EIN immediately. (You may also apply by fax or mail by completing Form SS-4 [PDF].)
3. Who Is the Responsible Party?
While applying for an EIN, the IRS requires that you disclose the name and taxpayer ID number (SSN, TIN, or EIN) of the person who’s responsible for the business. This should be the company’s principal officer, owner, trustor, general partner, or grantor and is similar to a registered agent for a state entity.
4. May I Cancel My EIN?
No. Once the EIN is assigned, it belongs to the registered business. According to the IRS, even if the number is never used to file a federal tax return, it may not be reassigned to another business. It will never be canceled, either, but the IRS will close the account upon request. Later, the responsible party may re-open the account by writing to the IRS.