When you decide to open a business, one of the first things you must do is get an Employer Identification Number. This is commonly referred to as an EIN, but you might have also heard it being called a Tax ID number or a Federal Employer Identification Number (FEIN). Either way, they are very important to your business for legal and tax purposes.
In this post, we’ll take you through why having an EIN is so important and we will provide the answer to the question, “how long does it take to get an EIN?”. There are several easy ways to get your EIN, but the wait times differ slightly depending on the route you wish to take.
Understanding the Importance of an EIN
An EIN is a vital piece of information for your business as it is the number that helps to identify you with the IRS. You can think of an EIN as similar to a Social Security number. Just as the IRS uses an SSN to identify individuals and their tax or residency status, an EIN helps the IRS to determine the tax status of a business.
An EIN also discloses certain aspects of information, such as the nature of the business and which capacity you operate under, such as a sole proprietorship or as a corporation. It is also an essential number to have if you are in a position where you want to start taking on employees. It is a legal requirement for you to have an EIN if you do take on people to work for you in your business. You will also need an EIN if you want to open a business bank account or apply for other business products and services like business or corporate credit accounts.
How Long Does It Take to Get an EIN
Applying for an EIN is easy to undertake. Previously, there were four main avenues you could choose to follow when applying for an EIN. These were online, telephone, fax and mail. However, it is not currently possible to apply for an EIN over the phone, by fax and through mail, so your only avenue to get an EIN is through the IRS’ online service.
So, if you’re thinking to yourself, “How long does it take to get an EIN?” The answer is determined by how long the online application process takes, which we will outline below.
Online Application Timeline
The online application process is the quickest way to get an EIN. It is entirely free, and you can get the EIN as soon as you correctly enter all the information on the online form. The entire process should only take you around 30 minutes to complete, and it is a simple matter of answering some questions about your company. If you want to know what kind of questions to expect from the online form, then you can have a look at an SS-4 form before you start. This will make the process easier and even quicker when you fill out the questions online.
Common Reasons for EIN Delays
If you apply for an EIN number using the online portal, it is highly unlikely that there will be any delay in obtaining your EIN. However, when it was possible to submit your EIN application through the post or via fax, there was a bigger chance that you would run into some delays.
For example, it’s a lot easier to make a mistake on the SS-4 form when you fill it out manually. If there is a discrepancy in the information you provide or simply give answers that the IRS cannot process, the application process may be delayed. There is also a greater chance that the information will get lost, given that the information is submitted manually.
There may also be a delay if you find that your organization already has an EIN. You cannot apply for a new EIN under the same company name. If you are unsure about whether or not your business has an EIN or not, check to see whether the company has already filed tax returns to the IRS. Your EIN will be kept on record here.
You may also experience delays if there is a conflict in the names of your business or entity. There needs to be a unique name associated with your business for an EIN to be eligible for assignment.
If you are experiencing delays in obtaining your EIN, you can contact the IRS directly, where they may be able to help you. It’s important to remember that this phone line is extremely busy, and there may be delays when you try to get through.
Conclusion
Now that you have a better understanding of the EIN application process and how long it may take, it’s time to get one of your own! If you would like some more information on how to apply for an EIN, check out our blog, which takes you through the different processes and the best way to go about your application. For any more information about getting an EIN, looking up an EIN and how long it takes for you to get an EIN, then don’t hesitate to get in touch with our friendly team.