When it comes to the IRS, most of us would rather avoid them as much as possible, but the fact is that they are a natural part of life, especially if you are looking to start a new business. One of the most critical aspects of getting your company off the ground is to get a federal tax ID. As such, we are going to discuss why you would need a tax ID as well as go over the tax ID application process.
What is a Federal Tax ID?
Simply put, this is a number that you use to file your taxes. There are a variety of entities that require such ID numbers, including for personal use (a social security number) or your business (an employer ID number). No matter what kind you get, they are all called federal tax ID numbers as they all fall under the same classification.
Why Do I Need a Tax ID Number?
If you are starting a new business, then this number will be crucial for a lot of reasons. First of all, it’s necessary if you want to create a company that is not a sole proprietorship. This includes corporations, LLCs, and non-profits as well. So if you want to make one of those, then you need an EIN. Additionally, if you want to hire any employees, then you have to have this number to do so.
Apply for a Tax ID
If you’re wondering how to get a federal tax ID, the fact is that it’s a remarkably simple process. All you have to do is go online to a website like www.govdocfiling.com and fill out the application and submit it along with all of the requisite fees. In most cases, you can get your EIN within an hour, meaning that you can have your business up and running the same day.
Overall, it’s far better to have a tax ID than not, even if you never plan on hiring anyone. This is because it will keep your taxes separate from your company’s and it will ensure that you don’t risk identity theft or any such tax issues down the road.