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Is Federal Tax ID Number the Same as EIN For My Small Business?

September 19, 2023

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Your small business has several identifying markers for a variety of different situations, but when it comes to taxes, you'll need to know your Federal Tax Identification Number (FEIN) and your Employer Identification Number (EIN). You may ask, is a federal ID number the same as EIN? Fortunately, these two numbers are the same. Take a closer look at FEIN vs. EIN numbers, and discover how you can get a number for your small business come tax season.

Your Business's Number

A federal tax ID number or employer identification number is like a Social Security number for your business. Specifically, a FEIN number is used for paying the necessary state and federal taxes. Some states don't even have income tax, while others only tax income from dividends. Your business's structure will determine how income taxes are levied in states that do have income taxes. You may or may not need a state tax ID number for this, but most of the time, your federal tax ID number works.

When You Need a FEIN

Not all businesses need a FEIN, but the vast majority of them do. If you are a sole proprietor, for example, you may be able to use your personal Social Security number in place of a FEIN, but even many sole proprietorships need a FEIN to file taxes. You need a FEIN if your business meets any of the following requirements:

  • Has employees on payroll
  • Operates as a corporation or partnership
  • Files tax returns for excise, employment, alcohol, tobacco and firearms
  • Withholds taxes on income, other than wages, paid to a nonresident alien
  • Uses a tax-deferred pension plan or Keogh plan
  • Involved with any of the following kinds of organizations
    • Trusts
    • Estates
    • Real estate mortgage investment conduits
    • Nonprofits
    • Farmers' co-ops
    • Plan administrators

How to Get a FEIN

If you need a FEIN to pay the necessary taxes, simply follow the steps to get one for your business. The first step is to determine if you're eligible for a FEIN. Two primary indicators can usually provide the answer, and they are if your business is located within the U.S. or its territories and if you have a valid form of tax identification such as a Social Security number or another FEIN.

After you're sure you qualify, you need to complete Form SS-4: Application for Employer Identification Number. This can be completed on the IRS website, over the phone, or through the mail. Upon completion, it generally takes about two weeks for your number to activate in the IRS system. Keep in mind that there's no charge to apply for a FEIN, so you might as well do it even if your business doesn't technically need one. After all, the second you hire an employee or meet any of the other requirements, it can be helpful to already have one for your business.

Take Control of Your FEIN

At SPLI, we offer a variety of services centered on you and your business's success including making sure you're ready to comply with all tax regulations and understanding a federal tax ID number vs. an EIN. Get in touch with our team today to make your tax filings easier than ever.

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