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Determining If You Need an Employer Identification Number

If you want to hire employees or open a business bank account, you will likely need to acquire an employee identification number, or EIN, from the IRS. Furthermore, you may need to apply for an EIN to complete your yearly taxes if your business structure demands it. The issued number acts as a unique identifier for your company. You must meet the eligibility guidelines and complete the application process to acquire a unique EIN for your business operations. Read on to learn if you need to acquire an EIN for your company.

Assess Business Status

Although Missouri sole proprietorships have the ability to request an EIN, it is not required by the IRS. If you are operating a partnership or corporation, however, you must file for an EIN to report taxes at the end of the filing year. Furthermore, if you merge or restructure your partnership or corporation after acquiring an EIN, you will need to reapply for a new unique number to continue operations per usual. If your business has one or more employees, no matter its structure, you must apply for an EIN.

Examine Tax Information

If you will file alcohol, tobacco and firearms or excise tax returns, you must have an EIN to process your claims. You must also obtain this number if your company has a Keogh plan for retirement or withholds taxes on income for a non-resident employee. Any tax returns for employment will also require the use of an EIN for filing purposes. With an EIN, you will be able to generate your employees’ tax documents for their own filing needs.

Evaluate Organization Involvement

Your company’s direct involvement with certain organizations, including estates, non-profits, trusts and farmer’s cooperatives, may indicate you need an EIN right away. The only exemptions are honored for trusts involving IRAs, exempt business income returns and revocable trusts owned by grantors.

If you need help determining if your company needs, or could benefit from having, an employer identification number, contact the accounting professionals at accountRely in St. Louis, MO for assistance.

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