An Employer Identification Number (EIN), also known as a FEIN (Federal Employer Identification Number), is required for every LLC, company, and partnership to file taxes. Furthermore, obtaining an EIN is required by many banks, credit card companies, and vendors, therefore this should be one of your first tasks after registering your company. To obtain an Employer Identification Number (EIN), you must submit an online, faxed, or mailed application to the Internal Revenue Service (IRS).
You must enter the name of your business (if it is distinct from your own name), your major business or profession, and your principal business code when filing your yearly income tax forms, regardless of how you manage your firm (sole proprietorship, LLC, S Corp, or C Corp).
You must wait up to two weeks after receiving your number to submit an electronic return, make electronic deposits, or pass an IRS Taxpayer Identification Number (TIN) matching program. During this period, your company can utilize its EIN to open bank accounts and file paper returns.
Whether your company is a single proprietorship, partnership, LLC, or corporation, you may apply to obtain an EIN number online over the internet. Foreign applicants without an Individual Taxpayer Identification Number (ITIN) will not be able to get an EIN using the web portal. The following factors decide whether or not your company is eligible for an online application.
Reasons to Obtain an EIN
When launching a new business, you’ll need to acquire an EIN/Tax ID number. An EIN is necessary for all business entities to identify the taxpayer. When a company’s ownership structure changes, it normally has to file for a new EIN. An EIN is required for each at-will hiring employee, including domestic personnel. An EIN is required for a business to obtain a bank account or establish a line of credit. An EIN is required whenever a trust, pension plan, corporation, partnership, or limited liability company (LLC) is formed.
How Do Foreigners Obtain an EIN?
Foreigners without an SSN or TIN, on the other hand, are unable to apply online. This is because the online system asks you to fill out the appropriate SSN/TIN form.
At the same time, foreign firms require an EIN in order to submit the US tax form W-8 and/or take advantage of US tax treaty benefits.
So, foreigners who want to start a business in the United States but don’t have a US tax number inquire, “Is it feasible to receive a federal tax ID number without an SSN or TIN?” If that’s the case, how can you receive an EIN number?
Obtaining an EIN number from the state
You may need a state EIN number if your state requires you to pay state income taxes. You’ll need to check with your state tax authorities on how to receive a state EIN because the procedures vary by state.
What Should You Do After Getting Your EIN?
You must next register with the relevant state agency, or agencies, for your specific company type after applying for and receiving an EIN from the IRS. To get the EIN, you should hire a company like USAIndiaCFO which is a big name in India and USA to set up businesses for Indians in the USA. Click now to get quotes and consultations about your business.