One of the most important requirements for a business that's just starting out, a Federal Identification Number (FIN), which is assigned by the Internal Revenue Service, should be one of the first things the new business obtains. A Federal Identification Number is the same as an Employer's Identification Number, or EIN, consisting of nine numbers in the format "XX-XXXXXXX." It is the business equivalent of a person's social security number. Never use a FIN in place of an individual's social security number. Only use it for business purposes, on business-related documents.
Use the Internal Revenue Service checklist (see Resources for link) to determine whether your business needs a Federal Identification Number. You need a FIN if your business is one of the following: trusts (except certain grantor-owned revocable trusts, IRAs, exempt organization Business Income Tax Returns), estates, real estate mortgage investment conduits, non-profit organizations, farmers' cooperatives or plan administrators.
Gather the necessary information needed to complete the form: the legal name of the business or person who is requesting the federal identification number; the trade name of the business; the executor, administrator, or trustee if applying as an estate; the street address; the county and state where the principal business is located; the name of the responsible party; whether the business is a limited liability company organized in the United States; type of entity; if the business is a corporation, the name of state or foreign country where incorporated; the reason for applying; the date the business started; closing month of accounting year; highest number of expected employees within the year; date first wages or annuities were paid; principal activity of business; principal line of business or service; and, whether you have ever applied for and received a FIN before.
Apply online at the Internal Revenue Service website. The online application will require the same information as the SS-4 form except in different order and grouping. The first series of questions asks the legal structure of the business. Authentication of the responsible party for the business including the responsible party's name, individual taxpayer identification number or ITIN, and position with the business will be required in the next step. Verification of this information takes a few seconds and if there are no problems, you will have access to the next screen which asks for the business address. After entering the required address information, the next screen will be details regarding the activity the business will be engaged in. The final screen is the EIN Confirmation, where you will be given your federal taxpayer identification number. The entire process should not take more than 15 minutes, depending on how fast you type, how readily you have the information on hand and how fast your Internet connection is.
Apply by phone, fax or mail if you are uncomfortable applying online or have a problem with your Internet connection. The application process is essentially the same, only on paper. A completed SS-4 is needed to use each one of these methods. A federal identification number will be given immediately at the end of the telephone application process. A return fax number will be required if you choose to fax the application. Your federal identification number will be faxed within four business days. The mail application is the longest, taking up to four weeks to receive your federal identification number. Use only one application method for each business so that you do not receive multiple numbers.
Applying online for a Federal Identification Number is the preferred method of application.
The federal identification number can be used immediately after issuance to open a bank account, apply for a business license, and file a tax return by mail.
Businesses or entities whose principal place of business are located in the United States or a United States territory may use the online method of application.
A valid Taxpayer Identification Number is required to use the online method of application.
Obtain Federal Identification Numbers immediately over the phone (Monday through Friday from 7 a.m. to 10 p.m.) -- by calling 800-829-4933.
Do not pay someone to file a Federal Identification Number application. It is a free service offered by the Internal Revenue Service.
The online application process expires after 15 minutes of inactivity. The site does not have a "save" feature.
It takes two weeks for a Federal Identification Number to become part of the IRS' permanent record.