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Starting a business can be an exciting and challenging time. There are many things to consider, including tax obligations. One of the first steps to obtaining a tax ID number for your business is to complete IRS Form SS-4. In this comprehensive guide, we will explain everything you need to know about Form SS-4, including how to fill it out, common mistakes to avoid, and how to submit it to the IRS.
What is IRS Form SS-4?
IRS Form SS-4, also known as the Application for Employer Identification Number, is a form used to apply for a tax ID number, also known as an Employer Identification Number (EIN). The EIN is a nine-digit number that identifies a business for tax purposes. The EIN is required for most types of businesses, including corporations, partnerships, trusts, and estates.
Why Do I Need an EIN?
There are many reasons why you may need an EIN. First and foremost, it is required by the IRS for most types of businesses. Additionally, having an EIN can help establish credibility with customers, vendors, and financial institutions. It also makes it easier to open a business bank account, apply for loans, and get a line of credit. Finally, having an EIN can help protect your personal information by keeping your business and personal finances separate.
How Do I Fill Out Form SS-4?
Before you begin filling out Form SS-4, you will need to gather some information. Here is a list of the information you will need to complete the form:
- The legal name of your business
- Your business address
- Your business phone number
- Your business structure (LLC, corporation, partnership, etc.)
- The name and Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) of the business owner or authorized representative
- The name and SSN or ITIN of any additional owners or authorized representatives
- Whether you have previously applied for an EIN
- The reason you are applying for an EIN (new business, adding employees, etc.)
- The date you started or acquired the business
- The type of business you have (retail, service, manufacturing, etc.)
- The number of employees you have (if any)
- The estimated annual income of your business
Once you have gathered all of the necessary information, you can begin filling out Form SS-4. The form is divided into several sections, each of which we will explain in detail below.
Section 1: Identification of Applicant
In Section 1, you will need to provide the legal name of your business, your trade name (if different), your business address, and your business phone number. If you have a fax number or email address that you would like the IRS to use for correspondence, you can provide that as well. You will also need to indicate your business structure (LLC, corporation, partnership, etc.).
Section 2: Type of Entity
In Section 2, you will need to indicate the type of entity you are applying for. The options include:
- Sole proprietorship
- Partnership
- Corporation
- S corporation
- Trust
- Estate
- Non-profit organization
If your business structure is not listed, you can choose "Other" and provide a brief description.
Section 3: Reason for Applying
In Section 3, you will need to indicate the reason you are applying for an EIN. The options include:
- New business
- Adding employees
- Bankruptcy
- Change of ownership
- Other
If you select "Other," you will need to provide a brief description.
Section 4: Exemption from Withholding
If your business is exempt from withholding, you will need to indicate that in Section 4. Most businesses are not exempt from withholding, so you can skip this section if it does not apply to you.
Section 5: Closing Month of Accounting Year
If your business has a specific closing month for its accounting year, you will need to indicate that in Section 5. If you do not have a specific closing month, you can leave this section blank.
Section 6: Contact Person
In Section 6, you will need to provide the name and phone number of a contact person for your business. This person should be someone who is authorized to discuss your application with the IRS.
Section 7: Signature
Finally, in Section 7, you will need to sign and date your application. If you have an authorized representative, they can sign the application on your behalf.
Common Mistakes to Avoid
When filling out Form SS-4, there are several common mistakes that you should avoid. These include:
- Providing incomplete or inaccurate information
- Providing a Social Security Number instead of an Employer Identification Number
- Providing incorrect business structure information
- Providing the wrong reason for applying for an EIN
- Providing inaccurate contact information
To avoid these mistakes, be sure to double-check your information before submitting your application.
How Do I Submit Form SS-4 to the IRS?
Once you have completed Form SS-4, you can submit it to the IRS using one of several methods:
- Online - You can apply for an EIN online through the IRS website. This is the fastest and easiest way to apply.
- By Mail - You can mail your completed Form SS-4 to the appropriate address listed on the form.
- By Fax - You can fax your completed Form SS-4 to the appropriate fax number listed on the form.
- By Phone - You can apply for an EIN over the phone by calling the IRS Business and Specialty Tax Line.
Conclusion
IRS Form SS-4 is an important form that all businesses must complete in order to obtain an EIN. By following the tips outlined in this guide, you can avoid common mistakes and submit your application with ease. Remember, the EIN is an essential component of your business, so it's important to get it right the first time. If you have any questions or need assistance, don't hesitate to contact the IRS Business and Specialty Tax Line.
