Form SS-4: Guide to Apply for an EIN

Form SS-4: Guide to Apply for an EIN

Form SS-4, Application for Employer Identification Number (EIN), is the IRS form used to apply for an Employer Identification Number (EIN), also known as a Federal Tax Identification Number (TIN). The EIN is a unique nine-digit number assigned to businesses and other entities for tax purposes. It is used by the IRS to track a business’s tax filings and is required for various business activities, including hiring employees, opening a business bank account, and filing tax returns.

Whether you’re starting a new business, creating a trust, or setting up an estate, Form SS-4 is an essential step in obtaining an EIN. This guide provides a comprehensive overview of the application process, including when you need an EIN, how to apply, and how to properly complete the form.

Why Do You Need an EIN?

An Employer Identification Number (EIN) is used by the IRS to identify your business for tax purposes. If you are a business owner or responsible party for an organization, you’ll need an EIN for several reasons:

• Hiring Employees: If you have or plan to hire employees, an EIN is required for payroll tax filings.
• Filing Business Taxes: Most businesses need an EIN to file federal and state taxes, including income, payroll, and excise taxes.
• Opening a Business Bank Account: Most banks require an EIN to open a business account, which separates your personal and business finances.
• Establishing Business Credit: An EIN is required to apply for business credit, loans, and other financial products.
• Filing for Licenses and Permits: Some business licenses and permits require an EIN for issuance.

Who Needs an EIN?

While many businesses need an EIN, not all entities are required to apply for one. Generally, the following entities will need an EIN:

1. Sole Proprietors: If you are a sole proprietor without employees and do not meet any other criteria requiring an EIN, you may not need an EIN. However, if you plan to hire employees or operate as a corporation or partnership, you will need one.

2. Partnerships: Partnerships, including Limited Liability Partnerships (LLPs), require an EIN.

3. Corporations: Corporations, including S-corporations, C-corporations, and nonprofit organizations, must apply for an EIN.

4. Limited Liability Companies (LLCs): Most LLCs, including those with a single member, need an EIN, especially if they plan to hire employees or file taxes as a corporation.

5. Trusts and Estates: Certain trusts and estates may need an EIN to report income and file taxes.

6. Nonprofit Organizations: Nonprofit entities are required to obtain an EIN for tax-exempt purposes and to file annual returns.

If your business operates under a name other than your own (a DBA or “doing business as” name), you will also need an EIN, regardless of your business structure.

When Should You Apply for an EIN?

You should apply for an EIN as soon as you establish a business or need to report income or expenses for your organization. If you’re starting a new business, it’s typically best to apply for your EIN early in the process, as you may need it for opening a bank account, applying for licenses, and handling employee-related tax matters.

The IRS recommends applying for an EIN at least 4–6 weeks before you plan to file tax returns or hire employees. If you’re planning to file business taxes or apply for permits that require an EIN, don’t wait until the last minute to apply.

How to Apply for an EIN Using Form SS-4

Form SS-4 is the official document used to apply for an EIN. You can apply for your EIN in several ways:

1. Online Application (Fastest and Preferred Method)

   • The IRS offers an online application tool for businesses that are located within the United States or U.S. territories. The application process is free, and you can receive your EIN immediately upon completion.
   • To apply online, visit the IRS website and follow the step-by-step instructions.

2. Fax or Mail

   • You can also complete Form SS-4 and fax or mail it to the IRS. This method takes longer than applying online, and you will need to wait several weeks to receive your EIN.
   • To submit by fax, you can send the form to the IRS fax number: (855) 641-6935 (for U.S. applicants).
   • To submit by mail, you can send the form to the IRS address listed on the instructions.

3. Phone Application for International Applicants

   • If you are applying from outside the United States or U.S. territories, you can apply for an EIN by calling the IRS at +1-267-941-1099. This is the only option available for international applicants. The IRS will provide the EIN over the phone.

Step-by-Step Instructions for Completing Form SS-4

Form SS-4 requires detailed information about your business, including your legal structure, ownership, and tax responsibilities. Here’s a breakdown of the key sections of the form:

1. Legal Name of Entity (Line 1)

   • Enter the full legal name of your business as registered with the IRS or the Secretary of State. If your business is a sole proprietorship, enter your personal name here.

2. Trade Name (Line 2)

   • If your business operates under a “doing business as” (DBA) name, enter that name on Line 2.

3. Address (Line 3)

   • Provide the mailing address for your business. This is the address where the IRS will send any correspondence.

4. Responsible Party (Line 7a)

   • The responsible party is the individual or entity that controls the business and is the primary contact for the EIN application. This can be the business owner, a partner, or an officer of a corporation.

5. Entity Type (Lines 8a-8b)

   • Select the type of entity applying for the EIN. You will choose from options such as a sole proprietorship, partnership, LLC, or corporation.

6. Reason for Applying (Line 10)

   • Choose the reason you are applying for an EIN. For example, “Started a new business,” “Hired employees,” or “Changed the structure of my business.”

7. Date Business Started (Line 11)

   • Enter the date you started your business or the date you expect to start.

8. Number of Employees (Line 12-13)

   • Indicate how many employees you expect to hire and the type of employment taxes you need to report (e.g., federal income tax withholding, Social Security, etc.).

9. Principal Activity of Your Business (Line 17)

   • Provide a brief description of your business’s main activities.

10. Signature (Part II)

    • The responsible party or authorized representative must sign and date the form.

Common Mistakes to Avoid When Applying for an EIN

1. Incorrect Entity Type Selection
   Be sure to correctly identify your business structure (e.g., LLC, corporation, sole proprietorship) on the form, as it impacts how you file taxes.

2. Missing Information
   Double-check that you’ve completed all required fields. Incomplete forms can delay the process and prevent your EIN from being issued.

3. Using the Wrong Name
   Ensure you use the legal business name as registered. Any discrepancies can cause delays in your EIN application.

4. Failure to Apply in a Timely Manner
   Applying for your EIN as early as possible will prevent delays in business registration, hiring employees, and opening a business bank account.

Conclusion

Form SS-4 is a crucial document for businesses that need to obtain an Employer Identification Number (EIN). Whether you’re starting a new business, hiring employees, or applying for business loans, obtaining an EIN is one of the first steps you need to take. The application process is relatively straightforward, and the IRS provides multiple methods for applying. Be sure to complete the form accurately, and allow enough time for processing. Once you have your EIN, you’ll be well on your way to complying with federal tax laws and setting up your business for success.