If you are a young business owner, the process of setting everything up can be especially confusing. One of the things that you will need for your business come tax season is an EIN, or an Employer Identification number. The EIN number serves to identify your business to the IRS for tax purposes. Once you apply for and receive an EIN for a given business, that number will remain tied to your business and you will use it to file your taxes every year. Here is a bit more that young business owners should know about the EIN.
Age Limits: There is no age limit for acquiring an EIN. However, if you are a minor, you may want to check the laws in your given state to ensure that you are legally able to work. If you are not yet able to be an employee, you may be able to obtain an exemption as a small business owner- though minors will likely need parental consent.
Who Needs an EIN?: An EIN is required for small businesses and other ventures that require employees. For instance, if you are starting a business with a group of friends, you likely need an EIN. However, if you are an independent contractor and are the only employee in your business, you may not need that number and may instead use your social security number to file your taxes.
The Process: To receive your EIN, you will need to fill out Form SS-4. You can apply for an EIN online- this is usually fastest, easiest, and the most convenient method. You also have the option of mailing or faxing a completed SS-4 form to the IRS, but be prepared to wait several weeks for a response.
While being a young business owner can be complicated, tax season can be fairly simple with a bit of research and the right resources.
For more, visit www.irs-ein-tax-id.com.
