Tuesday, January 18, 2011

Should you Apply for an EIN?

So how do you know if you need an EIN number from the IRS? According to them if you answer yes to any of the following questions, then you should apply for one:

Have employees?

Operate as a corporation or partnership?

File Employment, Excise, or Alcohol, Tabacco & Firearms tax returns?

Withold taxes for a non-resident alien?

Have a Keogh plan?

Involved with a trust or IRA or a Exempt org or Estate or something with mortgages, deal with a farmer's co-op, non-profits or plan administrators? (That was a mouthful.)

 

Anyway- I think that "Yes!" to those questions indicate that you must have an EIN but the question is still open for the rest of us. My answer is absolutely- you still must. It has helped in nearly every phase of naming, generating, and setting up. The bank wants it, the merchants for associate payments want it, even the business memberships and clubs usually require that you have one. I've also had to have one to open a wholesale account for some vendor applications. The best part is- you aren't pasting your social security number all of the place.

Side Benefits? When I registered for my business checking, it made my personal accounts upgraded to Super Service level- or something like that. The EIN number has helped out a lot.

Beware of those sites that offer to register you for a a fee. It doesn't cost a cent- it's instant and painless for sole proprietors at least. So check out the IRS application here: How to apply for an EIN.

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