If you are familiar with running a business that sells goods and/or services, chances are you already know what a tax ID number is and may even already have one for your eBusiness. New eBusiness owners should be aware what a tax Id number is, why you need one and how to obtain one for your new business.

What is a Tax Identification Number?

Tax ID numbers, also called an Employer Identification Number (EIN), is a special identifying number assigned solely to businesses by the IRS. Your tax ID number is used to identify your business to several federal agencies responsible for the regulation of business, both Online and Offline.

Many merchant accounts, banks and other financial institutions require a tax ID in order to utilize their services. Tax ID’s can also keep your social security information private as many institutions who request tax ID’s will also accept personal social security and banking information as an option (which has to be used unless the business has a tax ID).

Do I Need a Tax Identification Number?

As a general rule of thumb, nearly any business that offers goods or services for sale, that are taxed in any way, must get a business tax ID number. If the state your business is located in taxes personal services, or if you are required to collect sales taxes on purchases made, you will most likely need a tax ID number. As mentioned above, many agencies and institutions you deal with will require either a personal social security number or a tax ID number.

Almost any business that has employees and/or pays any kind of taxes will need a business tax ID. Generally, you should not worry about whether you are required to have a tax ID, you should just assume you do and take the steps to obtain one. It’s simple and easy to get so why not, right?

How Do I Obtain a Tax Identification Number?

The best, and quickest way to obtain your business tax ID is to contact your local IRS office or call the IRS tax hotline (800-829-4933) for more information on how to obtain your tax ID.

The form you will need to complete and return is the IRS SS-4. The form can be accessed and filled out in one of four ways by either downloading the form and sending it via fax, mail, by phone or applying via the Web.

Apply via the Web:

• The Online tax ID application can be accessed by clicking here (Web page).
• Instructions for filling out the form can be accessed by clicking here (PDF).

Apply via Phone:

• Business owners can also obtain a tax ID by calling the Business & Specialty Tax Line at (800) 829-4933 between the hours of 7:00 a.m. - 10:00 p.m. local time, Monday through Friday. A phone representative takes the information, assigns the tax ID, and provides the number to an authorized individual over the telephone.

Apply via Fax:

• Business owners can complete the Form SS-4 (PDF) and fax it back to their individual state’s fax number. Be sure to include a return fax number so they can send back your tax ID via fax. It typically takes between 1 - 4 business days to receive back.

Apply via Mail:

• Out of the four options listed, mail takes the longest. It typically takes between 3 - 4 weeks to receive via mail once the Form SS-4 (PDF) has been completed and mailed to the appropriate address.