How to get a tax id number for my business
How To Get A Federal Taxpayer Identification Number (EIN) for a California Business
Prepared By: Melissa C. Marsh. Los Angeles Business Attorney
Written: March 2009 - Last Updated: December 2011
What is a Federal Taxpayer Identification Number?
A federal taxpayer identification number (a.k.a. EIN, Tax ID Number, taxpayer identification number) is to a business, what your social security number is to you. Every California corporation and every California limited liability company (LLC) will need to obtain an taxpayer identification number (EIN) to open a bank account in the name of the corporation, or the name of the LLC. Many sole proprietors also should consider getting a taxpayer identification number (EIN) to avoid having to provide business vendors and customers with their social security number.
We can prepare the required paperwork for you to get an EIN for your small business, LLC, or corporation for just $125 and typically our turn-a-round time is less than 4 hours. Order Your New EIN Online .
Why do I Need to Get a Taxpayer ID Number, or EIN?
First, banks require almost every business to have a taxpayer identification number (EIN) to open a bank account. Second, if your business plans to pay wages (which it should), the payroll taxes must be filed with a valid taxpayer identification number (EIN). Third, if your business will pay any vendors or consultants you would be well served to have a taxpayer identification number, as the alternative is to provide your social security number to those stangers.
When Should a Business Apply for a Taxpayer Identification Number, or EIN?
Any person who forms a corporation, a limited liability company (LLC), or even plans to open a small business as a sole proprietor should apply for a taxpayer Identification number (EIN) before they engage in any business transactions. Doing so, will enable you as the owner to open a bank account, make deposits, pay for supplies, and pay vendors and/or consultants without providing them with your social security number.
Special Note for the Single Member LLC:
A single-member LLC is any LLC that is owned by one person, a husband and wife, or domestic partners. If a single member LLC intends to be taxed like an individual, or sole proprietorship (like an S-Corporation), the owner is not required to obtain a taxpayer identification number (EIN). However, if the owner of the LLC wants the LLC to establish its own business credit, or if the owner would prefer to keep his or her personal social security number more private and separate from the business, the owner of the LLC should obtain a taxpayer identification number (EIN) by filing IRS Form SS-4 .
If you opt to use your own social security number for your business, then the LLC can use the name and social security number of its owner for all federal tax purposes, and for reporting and payment of any employment taxes for employees of the LLC. If
the LLC-applicant indicates in box 13 of IRS Form SS-4 that it has or expects to have employees, the IRS will assign the single-member LLC its own taxpayer identification number (EIN).
What Information Will I need to Supply the IRS to Apply for an EIN?
The application for a federal taxpayer identification number (EIN) requires the applicant to provide the following information:
- the exact legal name of your business, corporation or LLC in Box 1. The name for a corporation must end in: Inc. Corp. Incorporated, or Corporation. For a limited liability company, the name must end with LLC without punctuation;
- the physical address of the business and the mailing address of the business;
- the tax treatment being sought (C corporation or S Corporation Status) in Boxes 8a through 9b (the most difficult part of the form);
- the basis, or reason, for applying for the taxpayer identification number (EIN) in Box 10;
- the date the business was started, or acquired (date of incorporation, organization, or purchase) in Box 11;
- the accounting year selected by the corporation in Box 12 (calendar year or fiscal year);
- the number of employees the business expects to have in its first year of operation and the first date wages were paid in Boxes 13 through 15;
- the principal business activity of the business in Box 16 (the box selected may impact the type of local licenses the business will be required to obtain);
- the type of goods sold, or services provided in Box 17; and
- your signature, or the signature of a designated third party representative (e.g. attorney or accountant).
Third parties (like an Attorney or CPA) may also request an federal taxpayer identification number (EIN) on your behalf via the internet so long as the attorney or CPA has obtained the proper written authorization. A third party who obtains an EIN for another party must retain a completed copy of IRS Form SS-4 signed by the taxpayer and the signed statement authorizing the third party to file the online application.
How Do You Obtain a Taxpayer Identification Number (EIN)?
To obtain a taxpayer identification number (EIN) on your own, you must complete and file IRS Form SS-4, Application for a Employer Identification Number.
If you would like us to prepare IRS Form SS-4 on your behalf, our fee is just $125 and our turn-a-round time is typically just 4 hours. Order Your New EIN Online. Be sure to include your full legal name, your business address, and the telephone number you want us to contact you at for additional information we will need to complete the process.
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Ms. Marsh provides various low cost In House Counsel Plans designed specifically for the small business owner. and if you just have a few simple questions she provides a Telephone Consultation for as little as $79.
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