If you work from home, you may be wondering if you need an EIN number. At IRS-EIN-Tax-ID, resources are provided to help you better understand the process of a tax ID number as well as to begin the EIN application process. The type of business you operate and the actions of the business will indicate whether or not an EIN is required.
Not Mandatory
An EIN is not mandatory if you are considered the sole proprietor or a Limited Liability Company. if you do not have employees and are filing as this type of company, you can use your social security number instead of the tax ID, known as an EIN. However, despite not being mandatory, you might want to consider applying anyway. Most banks and credit card companies will not issue business loans and cards unless you have an official EIN.
Mandatory
A business entity that is a corporation, trust, estate, and partnership, do require a tax ID. An estate tax ID number or one used within the other categories mentioned will be used by the Internal Revenue Service for identification purposes. You will use this number when filing taxes for your business.
The EIN number is nine-digits long and it works like a Social Security Number does for an individual, but for a business. The number works to identify the business within the IRS and can be used to open a line of credit for your business dealings as well as credit cards, and bank accounts. Because this ID is required to open such accounts, it is important to get the ball rolling on the process quickly.
At IRS EIN, online applications are used based on your entity type to file for a tax ID number. The process takes just a few minutes and in no time, you will have the proper identification in place for your business.
