Whenever you deal with the government, most of the time it can take forever to get something done. Anyone who’s ever been to the DMV or dealt with the IRS can tell you that the government is not well known for their speed and efficiency. Nonetheless, if you’re starting a new business, then you will have to go through the IRS to get a Federal Tax ID Number. If you’ve never done this before and it seems a bit overwhelming, let us walk you through the process of getting a tax ID number. The good news is it’s a lot simpler than you might think.
Do I Need a Tax ID Number?
If you are starting a sole proprietorship, which means that your company will have only one person working for it (you), then you won’t need to apply for a new ID. The reason for this is that you can connect the business to your personal ID, which is usually your social security number.
If, however, you want to hire employees or you want your business to be separate from yourself for financial purposes (such as opening a business bank account), then you will have to apply for a new number, which is called an EIN (employer ID number).
How to Apply
The submission process for getting a new ID number is rather simple, provided that you do it online. Technically, you can fax your documents or mail them directly to the IRS, but as we said, the government moves rather slowly when dealing with physical paperwork. Instead, you can file everything online and pay all of your fees at the same time so that you can get a response much faster. How long does it take on average? About two to three hours, with some cases taking as many as twelve.
This means that you can file your documents in the morning and have a new ID by the end of business day. Best of all, you can check your tax ID online to make sure that it is active and valid.
Overall, the process can be quite painless, as long as you have all of your documentation ready for submission.
