When you are trying to get your business off the ground, you will want to make sure you complete your EIN application in a timely manner. The EIN application is simple to complete, and getting this number will offer short and long-term benefits. Complete the application and you will be able to enjoy the benefits quickly.
When Does a Sole Proprietor Need an EIN?
When it comes time for your sole proprietorship to apply for an EIN, you can have peace of mind knowing the application is easy and free. If you have completed the application, you can often receive an answer within one day about whether or not you have been approved.
The sole proprietor Tax ID Number is perfect if you are going to perform services as an independent contractor. If you do not provide an EIN, the client will be required to withhold 28 percent of your payments.
How do You Know What Tax ID to Apply For?
If you are starting your business, obtaining an EIN is an obvious answer. With the EIN, your business will be able to hire employees and form a partnership. After you have secured an EIN, you can get a bank account that can help you pay your employees.
Having an EIN can be the perfect protection against identity theft. Identity thieves have been known to steal social security numbers, which can be used to apply for a fraudulent tax return or obtain a refund. With the EIN, you will avoid having to use your Social Security Number.
Several types of Tax ID numbers are available for businesses, so make sure to know what suits your sole proprietorship. This number will help you to not only secure capital but to you complete your tax returns every year as well.
