When starting a business, there are many steps to consider, one which is vital is obtaining an Employer Identification Number (EIN), often referred to as ‘tax ID’ for the company. This is where IRS form SS-4 comes into play.
If you are planning to set up a corporation in the United States or wish to manage your business from there, knowing what form SS-4 is and how to accurately file it is very important.
In this guide, you will learn everything you need to understand about Form SS-4: its purpose, who requires it, how to file it, and ways to avoid making mistakes.
This article aims at U.S citizens and foreign entrepreneurs alike, providing all the specifics on the EIN application process and guiding them through the steps.
What is Form SS-4?
An official form prepared by the Internal Revenue Service (IRS) having an Employer Identification Number (EIN) allocated to it is known as Form SS-4. This pertains to the business entity or different organizations therein.
An IRS-issued number, an EIN is basically a business identifier to be used for taxation and other monetary transactions which require business identification. You could say it’s like a Social Security Number (SSN) for a business.
The EIN is relevant to many aspects of a business, such as a federal tax return, a business bank account, hiring, as well as licenses and permits. To obtain this important number, one must file Form SS-4 first.
The form can be used by more than just businesses; it includes trusts, estates, nonprofit organizations, and other entities requiring a federal tax ID. Filing Form SS-4 ensures the IRS can adequately link the entity to its pertinent tax responsibilities.
Why is Form SS-4 Important?
Form SS-4 serves as the basis in establishing your business with the federal state. Some relevant areas why this particular form is crucial is the follow:
1. Allows Submission of SS-4 Application for Start-Ups
There are a number of situations when there is no other legally accepted way to acquire the number and meet various activities. The business cannot function without the number nor meet its legal obligations.
2. Must Cover Tax Obligations
An EIN is needed if the company intends to submit federal pay taxes, employment taxes, or excise taxes. It helps the IRS track the company’s submissions and payments.
3. Important for Reporting Employee Taxes
In case you intend to employ people, having an Employee Identification Number (EIN) is a prerequisite for reporting employment taxes to the IRS and filing W-2 and 941 forms.
4. Important for Creating Bank Accounts
In the United States, almost all financial institutions require an existing business checking or savings account for an EIN, including companies that are foreign owned and controlled.
5. Important for Obtaining Business Credit
Business loans, credit cards, and trade credit accounts are applied under the name of the business, making the business EIN important. This helps distinguish personal credit from the business.
6. Important for Applications of Some Permits and Business Licenses
Specific industries and geographic locations have stringent local or federal licenses and permits, many of which require an EIN.
To summarize, Form SS-4 enables you to conduct business in the United States in a more streamlined manner.
Who Needs to File Form SS-4?
There are numerous entities, whether an individual or a business that do not require the filling of Form SS-4, however, there are some that do have the need to complete this form. You need this form to be filled if your business falls under any of the following classifications:
1. Newly Established Business Firms
In the events that you are planning to start a Limited Liability Company (LLC), corporation, partnerships or any business structure, you are required to obtain an EIN through Form SS-4. This will serve as the preliminary steps towards legally registering your organization.
2. Foreign-Owned Companies
Any businesses, either sponsored or owned by foreigners seeking to conduct business in the U.S or wishing to open bank accounts or fullfill tax liabilities need to fill out the form SS-4. These also include the individuals as well as non-US companies.
3. Companies Planning to Recruit Workers
Those businesses who intend to recruit workers within the organization, whether immediately or in the future, need to have an EIN as mandated by the IRS prior to going through the process of recruitment.
4. Businesses with Certain Federal Tax Responsibilities
Other businesses are mandated to have an Employer Identification Number – EIN if they are needed to pay federal excise taxes, employment tax returns, or control retirement plans. Additionally some sole proprietorships are obligated to apply if they have more extensive tax reporting obligation.
5. Trusts, Estates, and Other Non Profit Organizations
Alongside businesses, Form SS-4 is also required for Trusts, estates of deceased individuals, and nonprofit organizations for tax reporting purposes. These entities are also required to hold an EIN.
6. Other Banking and Legal Requirements
Other companies seem to obtain an EIN regardless of their taxation or employment status, just so they can open a bank account in the US or enter into legal agreements.
So in other words, if your entity makes an application for a tax id number, you will need to fill out and submit Form SS-4.
Information Required to Complete Form SS-4
Completing Form SS-4 is a simple and straightforward process so long as all the required information is ready beforehand, here is a detailed outline of the documents needed.
1. Legal and Trade Name
You should submit all required names for your business: its legal name, and any trade name(s) used. Therefore do not forget to write the name exactly as it is registered at the state level.
2. Business Address
All businesses are required to provide contact details, including an address. Regardless of where a business is located, be it outside the US, it can still apply to have its address formatted correctly.
3. Responsible Party’s Information
You must name a responsible party, usually the individual who owns or controls the business. For U.S. Persons, this involves providing a full name along with a Social Security Number (SSN) or Individual Tax Identification Number (ITIN). Foreign nationals may need to submit a passport number or another form of identification if applying by fax or mail.
4. Entity Type
Mark the box that corresponds to the legal form of your business: LLC, Corporation, Sole Proprietor, Trust, Estate, etc. For an LLC, provide the default number of members and indicate if corporate tax treatment is elected.
5. Reason for Applying
Clearly explain the purpose for which an EIN is needed. Common purposes include starting a new business, banking, employee hiring, or restructuring an existing organization.
6. Start Date
Indicate when your business was legally established or acquired. This allows the IRS to ascertain the date for your tax obligations.
7. Employee Information
Estimate the number of employees you plan to hire over the next year and whether those employees’ wages will be subject to federal income tax withholding.
8. Business Activity
Indicate the primary business sector your company is involved in. The example, “E-commerce retail of clothing and accessories,” is more informative than “retail” and is preferable.
9. Contact Details
Provide an individual’s name along with their direct telephone line, and if available, their fax number for communication with the IRS.
This information, if filled out correctly, will help facilitate the processing of an EIN application.
How to File Form SS-4
Your location, either in the U.S. or abroad, determines the method of filing Form SS-4. Below are the methods of filing:
1. Online (Fastest—U.S. Applicants Only)
As an American business or a resident with a SSN or ITIN, you can submit your application using the IRS EIN Assistant:
- Visit: IRS EIN Online
- The services are available on Monday to Friday from 7:00 a.m. to 10:00 p.m. Eastern Time.
- The EIN is generated immediately after the form is submitted.
Important: Application online is limited to U.S. residents with SSN or ITIN. Foreign individuals cannot use this option.
2. Fax (For Both U.S. and International Applicants)
Completing Form SS-4 and faxing it directly to the IRS is another option you can use:
- U.S-based entities: Fax to 855-641-6935
- International entities: Fax to 304-707-9471 (non-toll-free)
The IRS fax application requests will be processed within 4-7 business days, and the EIN will be sent by return fax.
3. Mail (Slower Option)
Filing to the following address is an option for those who do not wish to use fax or phone:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
USA
Processing time for applications sent through mail may take 4 weeks or longer especially bound for international destinations.
4. Phone (Only for International Applicants)
Individuals and businesses outside the United States who wish to obtain an EIN can do so by calling the IRS at their direct line:
- +1-267-941-1099 (Not toll-free)
- They are available Monday to Friday, from 6 AM to 11 PM ET.
An IRS officer will assist in completing Form SS-4 during the call and will, as long as all details are accurate, grant the EIN immediately.
Common Mistakes To Avoid
Though applying for an EIN via Form SS-4 might appear straightforward, lack of attention to detail can result in denial or significant delays. Refrain from these common errors:
- Omitting the reason for applying
- Using an SSN or ITIN of an uninvolved individual instead of the responsible party’s SSN
- Filing multiple times for the same business
- Misclassifying business structure
- Using the wrong name, address, or entity name
- Omitting or providing contradictory details
Always verify the completed form before submission and consider obtaining professional assistance to sidestep complications.
Need Help Filing Form SS-4?
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Regardless if you are establishing an LLC, C Corporation, or foreign-owned entity, our professionals will take care of the filing and document verification with the IRS.
No need for an SSN or ITIN. We can assist you in acquiring an EIN without stress.
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Final Thoughts
Your business’s legal and financial operations in the United States commence with Form SS-4. You will require filing this form and an EIN if you wish to have employees, a bank account, rent a location, or receive services from the IRS.
Though you can choose to file it by yourself, enlisting aid from a professional ensures timely delivery with no holdups. Bizstartz is dedicated to helping entrepreneurs worldwide by choosing us. We take pride in facilitating accurate business formation and compliance.
Having accurate paperwork can help start your business confidently.
