Most businesses must use an employer identification number (EIN), issued by the Internal Revenue Service to track each entity’s tax obligations. Also known as a tax ID number, it’s a distinctive nine-digit number that’s legal required for corporations, partnerships, non-profit organizations and sole proprietorships that meet specific guidelines. There are several EIN number lookup methods available if you need to find existing business tax ID numbers.
Requirements for Sole Proprietorships
Many sole proprietorships without employees may not be mandated to apply for an EIN and will use the Social Security Number (SSN) of its owner for tax filing purposes. However, you need to be aware of certain situations that will necessitate you to obtain a tax ID number from the IRS:
- Filing pension or excise tax returns
- Hiring an employee
- Opening and funding a Keogh plan
- Filing an Alcohol, Tobacco and Firearms tax return
Ownership and business type changes could also compel you to file for an EIN. If you become the sole owner of a limited liability corporation (LLC) with existing employees, you’ll need a separate tax ID number for the LLC entity. You also must apply for a new EIN if any of the following scenarios occur:
- A deceased sole proprietor’s estate assuming ownership of his or her business
- Business type changes (for example, from a corporation to sole proprietorship)
- Inheriting a business that will be operated as a sole proprietorship
Convenience From an Independent Filing Service
According to the last available statistics from the Internal Revenue Service, there are around 25 million sole proprietorships doing business in the United States. Save time while filing for your own EIN by utilizing the IRS EIN Tax ID Filing Service as opposed to going through the IRS. After completing your application, you can use the verify EIN number link to check on the status of your request. For more information, you can contact the company directly.