If you operate a business, even a small one, acquiring an employer identification number is a vital step that must be taken. This number is essentially a Social Security number for your business and required by the IRS for bookkeeping purposes. Without a valid employer identification number you will find it impossible to do any tax related duties.
The old method for acquiring an employer identification number required you to fill out form SS-4 and file it with the IRS. This was a somewhat prolonged process and recently the IRS made significant changes to the process to streamline the acquisition of an EIN.
The new method of applying for an employer identification number is an interview process handled over the Internet. The interactive online interview takes approximately 15 minutes and must be completed within one sitting. There is no function to save and resume the process. The main benefit of this method over the old form is that you will receive an employer identification number immediately upon the verification of your information.
Some caveats to this online process include: your business must have been incorporated within the United States; you must have an individual taxpayer identification number if you are a foreign filer, the business must currently be located within the United States and third-party applicants must obtain authorization from the principal applicant. Aside from these few issues however it is now easier than ever to obtain an EIN.
Should you not want to participate in the online process it is still possible to use the old method of filing form SS-4 to obtain a number for your business. Just be prepared for a bit of a wait as this process is not as streamlined as the currently implemented on line method. Whichever route you choose to take, remember that you cannot put off obtaining an EIN.
