As a small business owner, you probably have a passion for what you do as well as a strong vision for a successful future. Part of the way you can secure that vision is by ensuring that your legal and tax ducks are in a row. Your business's EIN is integral to paying taxes as well as things like opening a business bank account, securing a loan or increasing your credibility. Over the years, your address or business name might shift, and when this occurs, it's vital to update the IRS about any changes.
Employer Identification Numbers
Employer identification numbers are nine-digit numbers issued by the federal government through the IRS. Your business will use its EIN on tax forms as well as when applying for financial services. If any of the following factors apply to you, the IRS requires your business to maintain an EIN and to keep your contact information and business name current with them.
- You have employees.
- Your business is a corporation or partnership.
- You have a Keogh retirement plan.
- You file tax returns for employment, alcohol, firearm, tobacco or excise taxes.
- You withhold taxes on non-wage income for a nonresident alien.
If your activities fall into one of the following categories, you also need an up-to-date EIN:
- Nonprofit organization
- Farm cooperative
- Plan administrator
- Certain types of trusts
- Real estate mortgage investment conduit
When You Need a New EIN
While it is unusual, there are conditions under which your business might need to apply for a new EIN. Sole proprietors must apply for a new EIN after bankruptcy proceedings, incorporation, becoming a partnership or purchasing or inheriting another business.
Corporations need a new EIN after a merger, changing to a sole proprietorship or partnership, becoming a subsidiary or receiving a new charter from the secretary of state. A partnership must get a new EIN if it incorporates or becomes a sole proprietorship or if partnership changes.
Applying for an EIN Number
Businesses that only need to make a simple change to contact information or business name do not need to apply for a new EIN. However, if conditions dictate that your business does need a new EIN, the IRS makes it simple for you to do so.
Domestic applicants can apply online using the IRS internet EIN application or by submitting Form SS-4 via fax or mail. No matter which method you use, be prepared to select the proper EIN category and provide your name, Social Security number, business name and contact information.
Changing Your Address
If you simply need to update EIN information following an address change, you do not need a new EIN, but you do need to know your current number. If you have lost your record of your EIN, you can call the IRS business and specialty tax line so they can do an EIN lookup for you.
While on the phone with the IRS, you can also request an address update to your file. You can also update your address by notifying the IRS in writing by using Form 8822-B or on your next tax return.
Changing Your Business Name
In order to update EIN information following a change in business name, procedures vary based on the type of organization you run.
- Corporations use Form 1120;
- Partnerships use Form 1065;
- Sole proprietorships must simply notify the IRS in writing at the address where they mail their tax return.
If you need acknowledgement of your name change for your tax records, be sure to request one, as they are not routinely sent out.
Anne Kinsey is an entrepreneur and business pioneer, who has ranked in the top 1% of the direct sales industry, growing a large team and earning the title of Senior Team Manager during her time with Jamberry. She is the nonprofit founder and executive director of Love Powered Life, as well as a Certified Trauma Recovery Coach, certified HRV biofeedback practitioner and freelance writer who has written for publications like Working Mother, the San Francisco Chronicle, the Houston Chronicle and Our Everyday Life. Anne works from her home office in rural North Carolina, where she resides with her husband and three children.