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WHAT IS A FEDERAL EMPLOYER IDENTIFICATION NUMBER?

A Federal Employer Identification Number (FEIN) is a nine-digit number that the Internal Revenue Service (IRS) uses to identify businesses. It is can also be referred to as a Taxpayer Identification Number, a Federal Tax Identification Number, a Federal Tax ID, or an EIN.

Contrary to popular belief, there is no difference between a FEIN and EIN. The FEIN acts as a unique identifier for a business when taxes are filed. The IRS allows a business to have taxpayer identification number if they meet the following criteria:

  • If a 130608_tax_forms_ap_328-300x201.jpg business has one or more employees
  • If the business is a corporation or a partnership
  • If they file Employment, Excise, or Alcohol, Tobacco and Firearms tax returns
  • If the business has a Keogh plan
  • If the business is involved with any of the following:
  • Trusts
  • Estates
  • Real Estate mortgage investment conduits
  • Nonprofit Organizations
  • Farmer’s cooperatives

• Plan administrators 

There are some businesses in which the IRS does not require a FEIN. Single Member LLCs and sole proprietors that do not meet any of the above criteria do not need use a FEIN. When a business spends more than $400.00 in a calendar year, the business is required to file taxes. In order to do so, the business must either use a FEIN or a personal social security number in order to identify the business.

In a LLC, the profits of the company are distributed to the partners who are then taxed individually. A LLC would not need a FEIN because they can substitute in their social security number when filing taxes for their business. It is safer for a business owner to give out their personal social security number as little as possible. A FEIN acts as a social security number that can be used when filing taxes, opening a business bank account, and to obtain a business credit card.

How to apply for an FEIN

The easiest and fastest way to apply for a FEIN is to apply online at the IRS website. Submitting an application online will give you a FEIN almost immediately after completing the form, but the number will not be active in the IRS system for two weeks. There are also other methods to applying for a FEIN, such as through fax or through mail. When using a method other than applying online, it may take up to four weeks to receive a FEIN.

When applying for a FEIN, you will need to obtain the following information about your company:

  • The legal and trade name of the business or individual that is requesting a FEIN
  • The mailing address, street address and county and state of where the business resides
  • The Social Security number of the responsible party
  • The business entity of the business
  • The number of members if the business is an LLC
  • The state of incorporation if it is a corporation
  • The reason as to why you are applying for a FEIN
  • The date you started the business
  • The highest number of employees you expect within the next 12 months and the date of which wages are paid

• The main activities of your business

There are benefits of having a FEIN such as the ability to obtain building permits and pay state or local taxes without using a personal social security number. Obtaining a FEIN is not necessary for a business, but there are benefits to obtaining a FEIN that can be helpful for the growth of a business.

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I have been working on my Utility Patent for almost 4 years. I have hired and fired two very reputable IP firms because with all their expertise and reputation for being some of the top firms in IP Law, I felt a lack of connection and care in my product, time and financial investment. Then I found Tommy and his team. Tommy does not waste time. He and his team are professional and extremely thorough. After 4 years, I finally found a legal team that I felt spent the time to really understand the components of my utility patent. Tommy also very mindful of cost and how and where my money would be better spent. I really feel I am in great hands with Tommy and his team. They have been patient with my revisions. And most importantly, they made me feel that they fully understood the importance this patent is to me. It has been a great and comforting pleasure working with Tommy.

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