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How to Get a Federal ID Number as an Employer

When you're a new business hiring from day one, getting a federal ID number from the IRS is vital to keeping your business legal. Referred to as an employer ID (EID) or a federal tax ID, it's used to track which employers are paying withheld taxes on behalf of which employees. Fortunately, it's also a relatively simple process, but knowing how that process works is half the battle. You can easily apply online for an instant number, via fax for a one- to two-week turnaround or by mail to get a number in four to five weeks. Here's what you need to do to get a federal ID.

  1. Determine who is your company's responsible party. The IRS wants to know who they need to speak to if there's an issue with your company's account, which means they need that individual's name.

  2. Have your responsible party do the filing. Because that person will be responsible for handling communications and interactions with the IRS, it's important that the relationship starts with that individual doing the filing for the federal ID number.

  3. You'll need to have contact information on hand. This will include your company's legal name, the trade name if it is different, contact information, the name of the executor, administrator or trustee if needed and the responsible party's name and their ID number

  4. You'll need business details as well. This includes what type of organization it is, the state or country where incorporated if applicable, why you're applying, when the business was started, how many employees you expect in the first full year and similar details.

  5. Finish your application. Include an accountant as your third-party designee if you want them to be able to discuss issues with the IRS, complete any remaining blanks and send the form in.

By getting a federal ID number from the IRS, you'll start your business off right without worrying about what needs to happen with your employees' withholdings. Not sure how to handle payroll or need help? The experienced professionals at AccountRely are here to help. Please feel free to contact us today to get connected with one of our experienced accounting professionals.

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