What is the EIN or FEIN number and how to apply for it?

When you intend to register a company in the United States of America, you will need to know what the ein or fein number is and what it is for. In this small guide we tell you what it is, how to apply for it and when you will need it.

What is the EIN or FEIN number?

The EIN stands for Employer Identification Number and is a 9-digit code assigned by the IRS. The purpose of its issuance is to distinguish the tax accounts of those who provide employment from those of other employers who do not have employees.

It is used by the tax regulator to identify owners who are required to report various burdens. It is also known as a FEIN or Federal Employer Identification Number and works like an SSN for your business.

As we will see below, you can apply for it for free via the IRS website, email, mail or phone. Before you apply, we suggest that you set up your business or enterprise.

How to apply for the FEIN or EIN?

When you reside in the United States and have a company domiciled in the United States, you can apply for an EIN using one of these options:

• Fax. You must send a facsimile of the SS-4 form (Application for Employer Identification Number) to the corresponding number (located on the form) so that it can be processed. This method is available 24/7 and you will receive your EIN by fax within 4 business days.
• Postal mail. Once you complete the SS-4 form, you can mail it to the IRS headquarters listed in the instructions for completing the form. Make sure the form contains all the required information. Send the document no later than 4 weeks prior to making a deposit or filing a tax return because that is the average time for you to receive your FEIN in the mailbox.
• Online. This method is available Monday through Friday from 7 am to 10 pm (EST). When you complete the return data, it is validated during the online session and given to you almost immediately. Taxpayers who apply online can view, print or save the allocation notification at the end of the session. The manager, owner, guarantor, etc., must have a valid ID number to make the online request.

International Applicants

Those who reside outside the United States and its territories can also apply for the FEIN to pay taxes. In this case, you will be considered as an international applicant, having 2 alternatives to do the process:

• Fax or mail. These are the same instructions as described above.
• Telephone. When you are abroad, you can call 1-267-941-1099 Monday through Friday, from 6 am to 11 pm (EST) to do the procedure. You must be authorized to receive the EIN and complete the SS-4 form. We recommend that you complete the form first before contacting the IRS because an IRS representative will use that information to assign you an identification number.

When do you need to get an EIN or FEIN?

The IRS has specific rules for business owners who must do this due diligence. If any of the following apply to you, then you need a FEIN:

• Your business has employees.
• Your company is a corporation or partnership.
• Your business has to file excise taxes.
• Your business withholds taxes on unreported wages of a nonresident alien.

There are other instances in which you may be required to have an EIN:

• Corporations. Whether it is a C or S tax structure, you must have the number.
• Sole owners. If you have no employees and do not report excise taxes/pension plans, you do not need it.
• Single member LLC. This is the same case as above and you will only need the FEIN when you are hiring employees.
• Partnerships or LLCs with several members. Under this structure, the EIN is mandatory because you must provide K1s to the members and declare the returns of the partnership.
• Non-profit organizations. For tax reporting purposes, you need the FEIN.

Why do you need the FEIN or EIN?

The usual recommendation is to obtain the Employer Identification Number regardless of the type of business you register. Among the advantages of having it, we can highlight:

• You will need it if you are going to hire personnel.
• With an LLC you can keep the corporate veil.
• It allows you to obtain a credit card or business account.
• It helps you prevent identity theft because it makes your SSN more private.

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