TO FED ID or not TO FED ID?
In my current blog series of the list of items that one needs to do when starting up a business, we find ourselves with yet another question, do I need to have a federal ID number or not? In my opinion, I don’t see any reason not to, but here is some information that may help your decision one way or the other.
Per IRS regulations you must have a federal EIN number if:
Your business structure is a partnership or corporation.
You have or will have employees.
You file any Employment, Excise, Alcohol, Tobacco or Firearm tax returns.
Have or will have certain retirement plans.
Are a Trust, Estate, Real Estate mortgage investment conduit, non-profit organization.
A Farmers coop or plan administrator.
Some banks also may require a FEIN to open a business checking account.
An LLC is not required to have a FEIN if the classification is sole-proprietor (Disregarded Entity). If you don’t have a FEIN, you MUST use your social security number on all forms. It’s easy, it’s free and it may avoid ID theft, I highly recommend obtaining a federal ID number.
To obtain a FEIN you can apply online at https://sa1.www4.irs.gov/modiein/individual/index.jsp or call 800-829-4933 or complete and mail out form SS-4.
Things are happening now! You are going into business, you have a killer company name, you have an LLC and you have a brand new federal ID number. It’s now time to open up that company checking account.
