This week in the Freedom Friday blog and email newsletter, we're continuing the series 10 Steps to Take Your Small Business to the Next Level. Today we're going to cover the fourth step in taking your small business to the next level, and that is to apply for an EIN. What is an EIN? An EIN is an Employer Identification Number, which is issued by the Internal Revenue Service (IRS). If you plan to open a bank account for your small business, your bank will require you to have an EIN, which is basically the same as a social security number for your small business. Your EIN might also be required to apply for business licenses and permits, filing tax returns, and if you plan to hire employees. There is no cost to apply for and receive an EIN from the IRS.
Here are three (3) easy steps to apply for an EIN:
1. Gather Information
The IRS requires you to provide some basic information about your small business as part of your online application. You will need to provide a physical business address; the name of the principal officer, manager, and owner, along with his or her social security number; if an LLC, the number of members; the type of business and primary activity; the date you started or acquired your small business; the closing month of the entity's accounting year; the number of employees you expect to hire; and contact information for the applicant.
2. Visit the IRS Website
The fastest way to apply for an EIN is to visit the IRS website between the hours of 7am and 10pm EST, Monday through Friday. The online application process will take about 5 minutes, and the IRS will instantly issue the EIN letter giving you your EIN number. If you can't apply online, you can mail or fax the SS-4 application form.
3. Watch Out for Issues
In recent years, the IRS has made some changes with who can apply for an EIN. All EIN applications (online, mail, or fax) must disclose the name and taxpayer identification number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner, or trustor. This individual or entity, which the IRS calls the “responsible party,” controls, manages, or directs the applicant entity and the disposition of its funds and assets. Unless the applicant is a governmental entity, the responsible party must be an individual (i.e. a natural person), and not a business entity. If there is more than one responsible party, the entity may list whichever party the entity wants the IRS to recognize as the responsible party.
If you are interested in starting a small business anywhere in Oklahoma, or you are interested in taking your small business to the next level, please contact me at [email protected] to schedule a FREE strategy session.
For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/