Introduction to EIN for New Business
An EIN, also known as the Employer Identification Number or Federal Employer Identification Number (FEIN), is assigned by the Internal Revenue Service (IRS) to new businesses in the United States. The primary purpose is to identify tax liabilities. Normally, when forming a business, a new EIN must be applied for, but LLCs and partnerships can transfer EINs for specific scenarios.
Reusing an EIN
When a new business is established, determining whether the existing EIN can be reused is essential. Reusing an EIN is possible in cases where only the business name or location has changed or when an individual owns multiple businesses. The rules for requiring a new EIN vary by entity type.
EIN and Business Operations
A new business must obtain a new EIN from the IRS if it deals with wages or taxes. It is feasible to reuse an existing EIN, especially for name changes.
Addressing EIN Queries
To verify the status of an EIN, contacting the IRS at 800-829-4933 is recommended. EINs are non-transferable; thus, acquiring a new EIN is necessary upon an ownership change.
Changing Business Name and EIN
The original business can retain the same EIN even after a name change. Business owners should inform the IRS of the name change through a written notification, especially for a sole proprietorship or single-member LLC.
Additional FAQ
- Does an EIN expire? EINs are permanent and do not expire once issued.
- Can one person have multiple EINs? Sole proprietors are issued only one EIN, while other entities can obtain multiple EINs for new businesses.
- Is TIN the same as EIN? TIN and EIN are not the same; they serve different identification purposes.
- Do DBAs file separate tax returns? DBAs are not separate entities and do not file separate tax returns.
Changing EIN Information
Updating EIN details necessitates submitting a letter to the IRS with the revised information. The IRS does not currently offer a specific form for changing previously filed EIN information.
Reporting Business Name Changes
Businesses can inform the IRS of name changes by submitting a form along with the annual tax return. It is essential to notify the appropriate IRS office with updated information.
Registering with Government Entities
Registration requirements for businesses vary based on the type of entity and locale. Limited liability companies, partnerships, and nonprofit corporations may need licenses and permits from the city or county.
Name Change Considerations
Before opting for a name change, consider compliance requirements regarding trademarks, domain names, and business licenses. Check for potential legal implications and notify relevant authorities about the name change.