Federal ID Number
Titles: Unraveling the Significance of a Federal ID Number
What Is a Federal ID Number?
A Federal ID Number, also recognized as a Federal Tax Identification Number, is a distinctive nine-digit identifier issued by the IRS in the format 00-0000000. Its primary purpose is to provide a unique identification for a business entity.
Are Federal ID Numbers the Same as an EIN?
Federal ID Numbers and Employer Identification Numbers (EIN) are interchangeable terms, referring to the identical identification number assigned to businesses.
Is a Payer’s TIN the Same as a Federal ID Number?
While a payer’s Taxpayer Identification Number (TIN) and Federal ID Numbers share a connection, they are not synonymous. TIN encompasses various identification numbers used by the IRS, with Federal ID Numbers being a specific type of TIN.
What Is a Federal Tax ID Number Used For?
Much like how Social Security Numbers serve individuals, Federal Tax ID Numbers primarily aid the IRS in identifying businesses for federal tax purposes. Additionally, these numbers find application in various financial activities such as opening business bank accounts, securing business loans, and tracking employee payroll distributions.
How Do You Get a Federal ID Number?
Securing a Federal ID Number involves a three-step online application process:
- Determine Your Eligibility: Ensure your business is eligible, with a principal location in the U.S. or a U.S. territory, no pre-existing Federal ID Number for the responsible party, and a valid TIN.
- Complete the Online Application: Conduct the application in one session, as it cannot be saved for later. Once submitted, the number becomes immediately available.
- Receive Your Federal ID Number: Use the assigned number for various business activities, such as opening bank accounts and filing tax returns.
In case of changes in business ownership or structure, a new Employer Identification Number must be applied for.
Where Can You Find Your Federal ID Number?
Locating your Federal ID Number involves checking various sources, including confirmation letters, previous year’s business tax returns, bank accounts opened with the EIN, relevant tax forms, state business division websites, and business loan or credit card applications. The IRS helpline at (800) 829-4933 can also assist in looking up the Federal ID Number.
How to Close a Federal Tax ID Number
Once issued, a Federal Tax ID Number cannot be closed or canceled. It stands as the permanent identification for a business entity. However, if you determine the unnecessary need for a Federal Tax ID, you can request the closure of your business account by providing specific details and sending a letter to the IRS at the designated address. It’s crucial to ensure tax filings are up to date before the closure process begins.