How do i find tax id number

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Every individual person gets a tax ID number when they are born, known as your Social Security number (SSN). Businesses also need a tax identification number, but in order to get one, you’ll have to register for one. These numbers are required to file business-specific taxes or to hire employees. Here, you’ll learn whether you need a tax ID number and how to get a tax ID number in 2022.

Do I Need a Tax ID Number?

A tax ID number isn’t necessarily a requirement for all businesses (sole proprietors are not required to have one), but it is impossible to accomplish certain things unless you have one. While not every business needs to get a tax ID number, most will want to. Here are the main reasons why you should consider obtaining a tax ID number for your business:

• To file taxes separately from your personal taxes: Depending on your business entity, you may be required to obtain a tax ID number so that the business can file taxes separately from your personal tax return. All partnerships, corporations and LLCs that elect to be taxed as a corporation must obtain one to file their taxes.
• When you want to hire employees: If you plan on hiring someone to work in your business, then you have to have your business tax ID number in order to do so.
• When you create a Keogh plan: Any tax-deferred pension plan, typically created for a self-employed individual, will need to obtain a tax ID number to open the plan.
• You may need one just for being in a certain industry: If your business is required to pay certain taxes beyond income tax, then you may be required to have a business tax ID number. An example would be a trucking company that is required to pay excise taxes.

Additionally, some financial institutions may not allow you to open a business bank account without one, and there may be some types of business licenses where one is required, but this is not always the case.

Regardless of the reason you may need one, it can be a good idea for every business to have a tax ID number in case the need arises at any given time.

Tax ID Number vs. EIN

An employer identification number (EIN) is provided by the IRS to your business so that your business can file taxes, and taxes you pay related to employees can be tied directly to your business. This is the same thing as a tax identification number and these terms are used interchangeably. When someone says they need your tax ID for your business, they are referring to your EIN number.

Some people refer to a tax ID number when talking about an individual tax identification number (ITIN). This is a tax processing number for certain nonresident aliens, their spouses and dependents who do not qualify for a Social Security number. This is only for individuals and not for business entities.

Overall, a tax identification number (TIN) refers to ID numbers that are provided by the IRS for the purpose of properly tracking taxes. Both businesses and individuals need a TIN in order to properly file taxes. The EIN is the only identification number that the IRS gives out specifically to businesses.

How To Get a Tax ID Number in 3 Steps

In order to get a business tax ID number, you’ll have to fill out an online application at IRS.gov and provide the necessary information. Here are the three steps you can take to immediately get your business tax identification number:

Step 1. Register Your Business With Your State

Before completing your online application with the IRS, you’ll need to register your business with the state you plan to operate in. The entity type and registration information will be needed when filling out the tax ID number application.

The online application will ask you for your formation date, legal business name, address and the state where you’re registered. Your business name must be approved by the state of operation prior to filling out your tax identification number application. A sole proprietor who must pay excise taxes could still obtain a tax ID number once a DBA (doing business as, a registration of a name other than the owner’s legal name) is registered with the state.

Step 2. Gather Necessary Information

You will need quite a bit of information about the business owner as well as the business itself before moving forward with the application. For example, you should have the following information on hand when filling out the application:

• Name of the business
• Name of the person responsible for the business
• Personal tax identification number of the individual responsible for the business
• Business mailing address
• Type of business entity
• State registered in
• Date the business was legally formed
• Number of employees you expect to be on the payroll in the next 12 months
• Date you started paying wages, if any
• Type of business entity

Keep in mind that in order to be eligible for a business tax identification number, you’ll need to be a U.S.-based business and the applicant (you) must have a valid individual tax identification number.

Step 3. Submit Your Application

Once you have this information, you’re ready to fill out the online application through the IRS website. Once your information is validated during the application process, you can submit your application and immediately get your business tax identification number in a PDF from the IRS. You can download, print or save the letter that contains your new tax number.

Bottom Line

The process of  starting a business and getting a tax ID number, or EIN, is pretty simple and can be completed online in only a few minutes. Once approved, you’ll be able to immediately receive your tax ID number. Most businesses should get a tax ID number, but sole proprietorships have the option not to.

Frequently Asked Questions (FAQs)

How much does it cost to get a tax ID number from the IRS?

It costs nothing to get a tax identification number from the IRS.

Is an EIN the same as a tax ID?

Yes and no. A generic tax ID number could be referring to several different numbers that the IRS uses to properly manage taxes. An EIN is only for businesses and it falls into the category of being a tax ID number. For more information, learn how to get an EIN.

Where can I get a tax ID number for my business?

You can apply online via the IRS website to obtain an employer identification number. The process takes only a few minutes, if you have the necessary information, and you will immediately receive your tax ID number upon completion.