Many rules and regulations must be followed in order to keep a company open and operating legally. Applying for a FEIN should be one of your first steps in establishing a business. Your FEIN must be included on all business tax returns, tax accounts, and other tax-related paperwork. In addition, many merchants, banks, and credit card firms want it. This article explains what a FEIN number for a business is and what it is used for. Let’s dive in!
What Is a FEIN?
Businesses operating within the United States are required to obtain a FEIN. Similar to how an individual’s Social Security number identifies them, the FEIN) accomplishes the same thing for businesses. An individual’s Social Security number serves as their tax number, often known as a tax identification number (TIN). One often confuses the two kinds of numbers together. Keep in mind that the former is intended for legal corporations, while the latter is for private citizens.
The IRS and other government agencies can identify and keep tabs on a company’s tax and financial dealings if they have the company’s FEIN. It’s needed for a variety of administrative tasks, including tax filing, retirement plan creation, and the provision of health and dental insurance to staff.
What Exactly Is the Fein Used For?
Your company’s name should appear on all official documents, including W-2s, 941s, and business tax filings. A FEIN is required for the completion of these forms. Make sure you have easy access to your business’s tax ID number so that you can include it on any required tax filings.
Who Needs a Fein?
After learning the basics of a federal EIN, you may be wondering if you need one. Then, why do companies require tax ID numbers? If you plan on paying your staff, you will need a federal tax ID number.
You’ll need a FEIN from the IRS if you:
- Form a company or a partnership to conduct business.
- Submit required tax forms (such as those for payroll or excise)
- Non-resident aliens should have taxes withheld from all sources of income.
- Have a Keogh plan
If you belong to the following categories of organizations, you could also need a Federal Employer Identification Number (FEIN):
- Businesses owned by trusts, IRAs, and tax-exempt organizations (with the exception of certain revocable trusts owned by the grantor)
- Estates
- Mortgage investment conduits
- Charitable groups
- Cooperatives of farmers
- Managers of the plan
It is necessary to apply for numerous EIN numbers if you operate more than one business that needs an FEIN. To find out if you require a FEIN, check with the IRS online.
What Do I Need to Apply for FEIN?
You’ll need to supply a few pieces of data when applying for an Employer Identification Number for your company. The following are things you need to apply for FEIN:
- Name, address, and trade name (your “doing business as” DBA name, if you have one) of the person or organization requesting the FEIN.
- Name and tax ID of the responsible party (the person or persons who have ultimate authority over your company and its assets and finances).
- Company name, incorporation or acquisition date, and company structure
- Justification for application (e.g., launching a new company, expanding operations, acquiring an existing business, or switching legal structures).
- If applicable, please specify whether employment taxes will be paid weekly or annually, and provide the date on which salaries were first received. Also, include the number of employees you anticipate having at its peak in the next 12 months.
If your company operates as an LLC, the IRS will want to know how many people are involved. You must also select the one that most closely fits the nature of your company from the following options.
- Providing lodging and meals
- Construction
- Manufacturing
- Insurance and Banking
- Medical care and welfare services
- Retail
- Actual Property
- Rentals and leases
- Shipping and Storage
- Agent/broker in wholesale or other wholesalers
- Other
How Can I Get a FEIN?
Here is how to get it:
#1. You Must First Verify That You Qualify For a FEIN
For a Federal Employer Identification Number (FEIN), you need to meet two requirements: (1) have a valid Social Security number or other form of tax identification (such as another FEIN); and (2) have your principal place of business within the United States or its territories.
Your primary place of business must be in the United States or one of its territories, as this is where you will earn the bulk of your revenue. Therefore, you may still be qualified for an FEIN even if you run a business in a country other than the United States. You don’t have to be the business owner to apply for an FEIN, but you should be someone who has direct experience with the company’s finances. It is possible for a secretary or administrative assistant to file for an FEIN on your behalf by signing and filling out the third-party designee portion of Form SS-4.
#2. Compile Data for the Internal Revenue Service
Fill out Form SS-4: Application for Employer Identification Number with the appropriate information for submission to the IRS. To apply for a Federal Employer Identification Number (FEIN), your company must have a U.S.-based physical location. If your company is an LLC or a corporation, you must include this on the application form. You must identify your company’s members if it is an LLC. Please provide more detail about the services you offer.
You’ll need to know the following extra details for your application:
- Motive behind requesting FEIN registration. You might, for instance, have recently reorganized your company or be introducing new products.
- When your company was established or purchased.
- The sector or sectors in which you operate, and the goods or services you offer, such as retail or consultancy.
- When your company initially started paying staff salaries.
- Your company’s fiscal or accounting year-end date. If your tax payments follow the calendar year, this is usually in the month of December.
- The highest possible projection of new hires for the upcoming year.
#3. Apply For a FEIN Online, by Phone or through the Mail
If you need an FEIN, you can get one in a few different ways:
By phone:
(800) 829-4933
Postal service/fax:
You can download Form SS-4 from the IRS website and find the local fax and mailing locations there.
On the IRS website:
If you need an FEIN, you can apply for one online without having to fill out Form SS-4 by answering a series of questions in a live chat. The service hours are 7 a.m. to 10 p.m. EST, Monday through Friday.
No matter what approach you use, the IRS will not have your new number operational until after two weeks have passed. A FEIN can be useful for businesses of all sizes, so consider getting one even if you aren’t required to. There is no cost associated with doing so, and you never know when you might need to bring someone on staff or when things will change in your organization.
How Often Do I Have to Update My FEIN?
You are not required to modify your FEIN once you have acquired it unless the IRS requires it for any reason. If your company is incorporated, you must update your FEIN if any of the following situations apply:
- Your company becomes either a sole enterprise or a partnership.
- When two companies merge, a new company is formed.
- When another company acquires yours, it becomes a subsidiary of that company.
Your partnership business will need a new FEIN if any of the following apply:
- The company is now run by a single individual.
- Your company is now incorporated.
- A new alliance is formed on top of the existing one.
As a sole proprietor or limited liability company with a FEIN, you must update your FEIN if:
- You’ve decided to file for bankruptcy protection.
- The company becomes incorporated or a partnership.
- Acquiring a stake in a competing company.
Changing your FEIN is not required if you merely alter your company’s name or address.
When Else Would You Need a FEIN?
A FEIN is also required whenever taxes are withheld or paid by your business or whenever W-2s or other similar forms are issued to employees. A W-2 form must be issued by the employer to each employee at the end of each tax year. A professional payroll processing service can file all of your payroll tax forms for you, including quarterly and annual reports that include your FEIN.
Each independent contractor you paid $600 or more to during the tax year requires a 1099, and you’ll need to include your FEIN on that form.
A Federal Employer Identification Number (FEIN) is required for numerous processes, and it will also be used by your staff and independent contractors when filing taxes on your behalf.
How to Find Your FEIN if You’ve Forgotten It
A FEIN serves as the equivalent of a social security number for your company. Protecting your EIN in the same way that you would your SSN will help prevent fraudulent use of your business’s identity. In truth, there is no EIN automated look-up in place, as this would increase the possibility of a taxpayer’s identification number falling into the wrong hands. If you’ve lost your Social Security number, the IRS gives instructions on where to look for it. The IRS recommends that you do the following:
- Track down the FEIN approval letter you received from the IRS.
- If you provided your number in order to open a bank account or obtain a business license, get in touch with your bank, the state, or a municipal agency.
- Find a copy of a tax return you filed in the past; it will contain your EIN.
If none of these methods work, you will have to contact the IRS directly and request an EIN lookup. Information that can be used to identify you will be requested. In addition, you need to be a member of the company’s staff who is allowed to accept the number. You need to be a director or authorized member of a limited liability company (LLC) or a corporate official to qualify. The IRS agent will offer your EIN over the phone if you are able to prove your identity and authority.
I Don’t Have Employees. Do I Need a FEIN?
Yes. Your FEIN (or federal business tax ID number) serves as a unique identifier for your company to the government, much like a Social Security number does for individuals. Even if you don’t plan on hiring any workers, an EIN is required by the IRS for every corporation. In addition, financial institutions, credit card firms, and suppliers may require your EIN before processing any payments or orders.
When Compared to a Tax ID Number, How Does a FEIN Differ?
Federal employer identification numbers (FEINs) are typically only issued to individuals who specifically request them. The Employer Identification Number, or FEIN, will be used on tax and payroll documents to uniquely identify your organization. Many states won’t issue a second tax ID if you already have a FEIN. With a few notable exclusions, a FEIN can be issued to virtually any kind of business. If you’re a sole proprietor, for instance, you can use your Social Security number as your tax ID. Your business’s tax identification number (EIN) will need to be converted to a FEIN if you decide to incorporate it.
Is a FEIN Available to the General Public?
It is widespread knowledge that FEINs are used by many businesses and organizations when filing taxes and other financial information with the IRS and other government agencies. Businesses need a company’s FEIN in order to transact with it. It’s frequently required when filling out W-9 forms, providing credit references, or exchanging other types of data. When you give out your FEIN, you put yourself at risk of unwanted exposure. Like Social Security numbers, Federal Employer Identification Numbers (FEINs) should also be used and disclosed discreetly to prevent identity theft and fraud.
Is a FEIN Required if I Am Unsure if I Will Need One?
Check the IRS website if you’re unsure whether or not you require a FEIN. As long as you report them on your personal tax return, you may get by with just your Social Security number and not get one. A Federal Employer Identification Number (FEIN) is needed to declare them on a business tax return. If this is unclear to you, you might seek the assistance of an online payroll provider for processing and filing payroll-related taxes.
How Do I Find My FEIN Name?
You can ask for the FEIN by contacting the company’s accountant or financing office, but they are under no obligation to give it to you. Look for the corporation in the records maintained by the secretary of state or any other online federal, state, or local filings. Pay someone else to do the EIN search for you, or use a commercial database.
Is a FEIN the Same as an SSN?
Contacting the company’s accountant or finance department for the FEIN is optional, but recommended. Search for the company’s name in federal, state, and local internet filings, as well as the documents kept by the secretary of state. Use a commercial database or hire a professional to look for EINs for you.
Is Your FEIN Your Tax ID?
The Federal Employer Identification Number (FEIN) is a nine-digit identification number for businesses that serves a similar purpose to a person’s Social Security number. A person’s Social Security number serves as their tax number, often known as a tax identification number (TIN).
How Many Digits Are in The FEIN Number?
An employer identification number (EIN) is a nine-digit number given out by the IRS. It’s how businesses and others with no staff can track their tax accounts. The Internal Revenue Service uses this number to track down taxpayers who must submit certain company tax returns.
Final Thoughts
It is impossible to apply for a company license without first obtaining a Federal Employer Identification Number (FEIN). Also, there is no requirement for a FEIN for sole entrepreneurs and independent contractors who do not hire any other people. A company’s Federal Employer Identification Number (FEIN) may also require modification in special cases.
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