A federal employer identification number (EIN), also known as a tax ID number or simply a tax number, is a nine-digit code used by a business to identify itself when filing taxes, banking or conducting other financial transactions like payroll.

Near the top of your to-do list when starting a new business in the Tampa Bay area, or making changes to an existing business, is applying for an employer identification number. Your CPA in Tampa, Reliance Consulting, LLC, can guide you through the sometimes-confounding red tape that comes with starting or operating a business – such as determining whether you need a new EIN, based on Internal Revenue Service guidelines.

In general, the IRS says you need a federal EIN if you answer “yes” to any of the following questions:

• Do you have employees?
• Do you operate your business as a corporation or a partnership?
• Do you file employment, excise, or alcohol, tobacco and firearms tax returns?
• Are taxes withheld from non-resident alien employees, other than on income?
• Are you a sole proprietor with a Keogh pension plan?
• Are you involved with trusts, IRAs, estates, non-profit organizations, farmers’ co-operatives or plan administrators?

Owners of sole proprietorships often choose to use their social security numbers as their EIN. Even if your business already has an assigned EIN, you’ll probably need a new one if you incorporate, take on partners, purchase or inherit a business, or if you are subjected to a bankruptcy proceeding.
To acquire an EIN, you must apply to the IRS using Form SS-4. Forms are available at IRS and social security offices, or you can apply on-line through the IRS website. Some states also require a state EIN.

For help with this or any other big or small business question, contact a CPA in Tampa from Reliance Consulting.