Let’s start by defining what an EIN is. The Internal Revenue Service (IRS) issues each business an EIN, which is a special nine-digit number used for tax purposes. A “tax ID number” or “federal tax ID number” are other names for it. Your SSN belongs to you personally, whereas your EIN belongs to your company.
How does your EIN relate to your personal taxes if it isn’t directly connected to your SSN? Any money you received from your business must be reported when you file your personal tax return. Profits from sole proprietorships, partnerships, LLCs, and S companies are included in this. Your company income and deductions should be reported using Schedule C (Form 1040).
Let’s move on to the questions that are connected now. What is the cost of an EIN number from the IRS? The good news is that the IRS offers free EINs. You can submit your application by phone, fax, mail, or online. It’s not required to employ any of the third-party firms that will apply for an EIN on your behalf in exchange for a charge.
How much does an Illinois EIN cost? Obtaining an EIN from the IRS is free once more. For example, in Illinois, businesses must register for a free Illinois Business Tax number. However, some states require businesses to register for a state tax ID number, which may come with a price.
Who should obtain an EIN? Any company that has workers, is taxed as a partnership or corporation, or has to file taxes or disclose specific information is required to obtain an EIN. This covers sole owners who submit specific documents, including Form 1099-MISC.
Do an EIN and a sales tax ID have the same meanings? No, an EIN and a sales tax ID are not the same thing. A sales tax ID, commonly referred to as a seller’s permit or sales tax license, is an identification card provided by the state that enables businesses to collect and submit sales tax. Although they are independent IDs, depending on the state, you could require an EIN to apply for a sales tax ID.
In conclusion, even if there is no direct connection between your EIN and SSN, it is still a crucial number for your company. It is required for specific tax filing and reporting requirements and is available for free from the IRS. Consult a tax expert if you have any additional inquiries concerning EINs.