IRS Registration: Complete Procedure and Requirements

A business registration involves obtaining an Employer Identification Number (EIN). In addition to allowing the IRS to track your business activities, your EIN will enable you to accomplish essential tasks such as hiring employees and opening a business bank account.

IRS Registration

Your business is formally registered with the IRS when you obtain an EIN. While obtaining this number isn’t the first step in starting your business, it is among the most important.

A small business owner does not necessarily need an EIN if they are a sole proprietor. In any case, applying for this number can be very advantageous, and already having this number makes expanding your company much easier. If you decide not to apply for an EIN, you can use your Social Security Number to pay your business taxes.

The IRS legally requires several types of business entities to have an identification number:

  • Corporations
  • Limited liability companies
  • Partnerships

Obtaining a tax identification number may also be required for other reasons. If your business withholds income taxes that don’t count as wages, you’ll need an EIN. Also, if you file an employment tax return or excise tax return, you will need an EIN. One of the most significant benefits of having an EIN is that it will make it easier to keep your business finances and personal finances separate.

How to Get Your EIN

Your EIN can be obtained in several different ways from the IRS. To begin with, you can apply for your tax ID by fax. Form SS-4 can be completed with the relevant information and faxed directly to the IRS. Upon reviewing your form, the IRS will determine if you need an EIN. The IRS will assign you a number based on the type of entity you are if it decides you need a federal tax ID number.

Your EIN will be faxed to you in 4 business days if you include a return fax number on your application. You can also request an EIN by mail. If you file by mail, you will need to wait four weeks after your application is approved before you receive your ID number.

Don’t forget to include the correct information on Form SS-4 before mailing your application. The IRS will examine the information you provide to make sure you need an EIN, just as they do with fax applications. If you live outside the US and wish to obtain an EIN for your company, you can call to obtain your tax ID. They are available from 6 a.m. to 11 p.m. from Monday to Friday.

Please ensure that you have the authority to provide the information requested on Form SS-4 and that you have permission to receive an EIN before making this phone call.

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Register with Your State

Your business must be registered with the tax authorities in your state after you have completed IRS business registration. Even if your business operates only online, you are likely to have tax obligations at both the local and state levels. Every new business needs to register with its state revenue office. If you wish to collect sales tax, you may need to obtain a permit.

Getting Business Permits

Before you start offering goods or services to customers, you should be sure that you’ve obtained the correct permits and licenses for your business. Even e-commerce businesses, or businesses that you operate out of your home, must be licensed in certain jurisdictions.

You may need to contact several government agencies and fill out a large amount of paperwork, depending on where your business is located. If you can cover the expense, you may hire an attorney to help you with this paperwork. With professional help, you’ll be able to fill out your applications and receive your permits sooner quickly.

To find out what different permits and licenses you need, you should call your county clerk’s office or the permitting office in your city. Also, you can visit the Small Business Administration (SBA) website, where you can find a tool for searching for permits and licenses.