Employer Identification Numbers and Sole Proprietors
Exactly who needs an Employee Identification Number (EIN)?
Also known as a Tax ID number, sole proprietors are required to
an employer identification number in the following circumstances:
1. If they have one or more employees.
2. If they have a Keogh plan
3. If they are required to file excise tax forms e.g. sales
tax, alcohol or tobacco.
What if I purchase a business?
If you purchase a business for which an employee identification
number is needed, use your own or get a new one. Whatever you
do, don't use the EIN of the previous owner.
What if I operate more than one business?
If you operate more than one business as a sole proprietor, you
should use the same EIN for each one. However if you operate
businesses as a different entity e.g. Partnership, Limited
Partnership, etc, you'll need a separate employee identification
number for each.
How Do I Get a Tax ID Number (EIN)
This is about the simplest thing you will have to do concerning
the IRS. Send IRS Form SS-4, Application for Employer
Identification Number, to the IRS address in the instructions to
the form. There's no excuse for not getting one as there is no
charge to get an EIN.
If you're reading this, you must have internet access. Use it.
You can download the form, at
http://www.irs.gov/pub/irs-pdf/fss4.pdf, for free. Just print it
out and send it in by mail, it should take about four weeks to
receive the number. If you need to file your tax return before
you receive the EIN, don't worry, just write "applied for" in
the space where the EIN should go.
But I need it right now!
If you're in a rush you can also get an EIN over the phone at
1-866-816-2065, from 7:30 a.m. to 5:30 p.m. EST; however, you'll
still need to fill out a paper SS-4 form and mail or fax it
within 24 hours. The advantage of using this system is that you
will receive the EIN immediately and you can use it on your tax
forms right away.