What is a FEIN and Do I Need One for My Business?

FEIN for my business, DuPage County Business Law AttorneyBusinesses can be formed and registered in many different ways, and they have to meet certain legal requirements depending on the method of formation and registration the owners choose. Some businesses for example, need to have a number referred to as a FEIN to file taxes and meet other regulatory needs, while others do not.

A FEIN is a Federal Employer Identification Number, and is sometimes referred to simply as an EIN. This number serves almost like a person’s Social Security number, except it is associated with a business entity. Most businesses need an EIN, except perhaps sole proprietors who can use their Social Security numbers in place of an EIN for many of their business transactions.

However, if you are a sole proprietor, having an EIN can help you keep your own personal information secure. There are transactions during the course of your business where you would be required to provide a tax identification number, and the EIN would meet this requirement without you having to give out your social security number. With the possibility of identity theft, the EIN can be a good security measure.

The IRS states that you will need an EIN, even as a sole proprietor, if you meet any of the following criteria:

  • You have employees;
  • You operate your business as a corporation or a partnership;
  • You file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms;
  • You withhold taxes on income, other than wages, paid to a non-resident alien;
  • You have a Keogh retirement plan; or,
  • You are involved with certain organizations.

If you decide you need an EIN for your business, applying for one is not difficult and can be accomplished in a fairly short amount of time if you have all the information readily available. You can apply for an EIN by mail, fax, telephone, or online via the IRS website. There is no charge to apply for an EIN.

When your business is assigned an EIN, it becomes the permanent number associated with that business and is not given to other businesses, even when you do not use it. The IRS provides ways for business owners who no longer wish to use the EIN associated with their business to close out their IRS account on that EIN. You can use this option if you apply for an EIN and decide you do not need it, never use it, or your business closes down before you get a chance to use it.

Contact an Experienced Business Attorney

Whether you are just starting out in your new business or have an established operation in need of some legal guidance, contact us at Momkus McCluskey Roberts, LLC for more information about how our experienced DuPage County business law attorneys can help you.

Source:

https://www.irs.gov/businesses/small-businesses-self-employed/canceling-an-ein-closing-your-account

Share
This entry was posted in Illinois Business Attorneys and tagged , , , , , . Bookmark the permalink.

Comments are closed.

Main Office
  1001 Warrenville Road, Suite 500
Lisle, IL 60532

  (630) 434-0400

 

Talk to our attorneys now. Call or email us:   

(630) 434-0400 Contact Us