A tax ID number, commonly known as an Employer Identification Number (EIN), is required if you’re launching a business in Colorado or changing the way your company is structured. This particular nine-digit number serves as your company’s tax identification number. Here is how to obtain a tax identification number in Colorado.
Determine Your Eligibility in Step 1
Make sure you’re qualified before submitting an application for a tax ID number. In general, if you hire people, run a partnership or corporation, file employment, excise, alcohol, tobacco, or weapons tax returns, or withhold taxes from revenue received to nonresident aliens, you need an EIN. You might not require an EIN if you’re a sole proprietor without workers, but getting one is still advised to keep your personal and corporate finances distinct.
Application Step 2: Online, Mail, Fax, or Phone
The IRS website is the best and quickest place to submit an online application for a tax ID number in Colorado. Additionally, you can apply by phone, fax, or mail. Visit the IRS website and select “Tools” then “Apply for an Employer Identification Number (EIN)” to submit your application online. To finish the application, adhere to the instructions. After processing your application, you’ll get your EIN right away.
Download Form SS-4 from the IRS website and manually complete it if you’d rather submit your application by mail, fax, or phone. To apply by phone, call the IRS Business & Specialty Tax Line at 1-800-829-4933, or mail or fax the completed form to the relevant IRS office. If you submit your application by mail, fax, or phone, it could take a few weeks to get your EIN.
Step 3: Submit Your Business Tax Return for Colorado You must file your Colorado business tax return once you obtain your EIN. Even if they don’t owe any taxes, every business operating in Colorado is required to submit a yearly income tax return to the Colorado Department of Revenue. Depending on your business structure and fiscal year, you must file your Colorado business tax return by a certain deadline.
Step 4: Optionally, convert your sole proprietorship into an LLC You must submit articles of organization to the Colorado Secretary of State if you are a sole proprietor and want to convert your company structure to an LLC. Additionally, you’ll need to update your company’s records and contracts, get any relevant licenses and permissions, and register for a new EIN if you previously held one as a single proprietor. Before making any modifications to your company’s structure, it is advised that you speak with an accountant or business lawyer.
Finally, acquiring a tax ID number in Colorado is an essential first step when beginning or expanding your firm. It’s crucial to follow the right procedures to confirm your eligibility, submit your application through the proper channels, file your Colorado business tax return, and make any necessary adjustments to your company’s organizational structure. You may get your tax ID number and start running your business with confidence with the appropriate planning and direction.