Are you wondering how you can get an EIN Number in Idaho? If YES, here are 4 proven steps to get an EIN Number easily in Idaho in 2023. Every day, entrepreneurs start up new businesses in Idaho. This is because out of all fifty states of the United States, the Gem State has the third-cheapest cost of living.
For savvy entrepreneurs, this more or less means that business investment dollars go further in Idaho than they do in other places. In addition, the state offers a significant opportunity share for entrepreneurs. Since state leaders are intent on growing Idaho’s economy, many business owners enjoy various tax benefits and other incentives when they move their facilities to Idaho.
Therefore, whether you are starting a new venture, applying for company financing, hiring a skilled workforce, or taking another business action, you might need a Federal Tax ID number. In addition, if you want your organization to compete for the many federal contracts offered to Idaho businesses, you likely need an EIN to participate in the procurement process.
Either way, navigating the complex system of federal tax regulations can be daunting. An EIN Number stands for Employer Identification Number and it will be issued by the IRS to your Idaho LLC. An EIN is to your Idaho LLC what a Social Security Number is to a person.
It helps the IRS identify your business for tax and filing purposes. Having an EIN for your Idaho LLC allows you to open a separate bank account under the LLC’s name, apply for certain licenses and permits, and handle employee payroll (if applicable). Even though it is called an Employer Identification Number, it doesn’t mean that you have to have employees. The EIN is just a type of Taxpayer Identification Number (TIN) that identifies your Idaho LLC with the IRS.
Why You Will Need an EIN in Idaho
The easiest way to think of an EIN is that it is a social security number for your business, and it can only be acquired from the Internal Revenue Service. Note that this can be done in several different ways but most recently, the IRS has provided the application process online.
There are reasons why you need to require an EIN in Idaho, and these reasons include;
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If You Would Have any Employees
Note that the major reason that you may need an EIN or a tax ID number is because you will have employees as part of your business operation. First, EIN is the acronym for “employer identification number”. It more or less means that if you are going to be an employer then the IRS expects you to have an EIN as part of your basic business structure. If you are an employer, then you are expected to do tax withholdings for your employees.
This tends to include both federal and state tax withholdings. Additionally, you would be mandated to apply for and obtained Workers Compensation Insurance, as well as unemployment insurance. Each of these things requires an EIN.
Meanwhile, for many small businesses, it doesn’t make sense to have employees owing to the administrative time and expenses involved in doing all these things. In some instances, a small business owner can hire independent contractors rather than employees.
An independent contractor is expected to track their own income and make their own withholdings and pay their own taxes. Also, an independent contractor is required to obtain their own insurances whether that would be for workers compensation or for unemployment.
Howbeit, Idaho law provides some very specific guidelines on whether a person is considered to be an employee or an independent contractor regardless of what you may be calling them. Being considered to be an employee under Idaho law really depends on several specific factors.
Will you be Filing a Tax Return for Your Business?
If you’re going to be filing tax returns for your business, then an EIN is needed on all federal tax forms as well as all federal payroll or employment tax forms. In Idaho, an EIN is also required on all state tax filings.
Will Your Business be A Corporation or a Partnership?
If you have created your business as a sole proprietorship, which simply means that you are the only person running the business and you have not formally filed for a corporation, an LLC, or a partnership, then your personal social security number acts as your business number as well.
At this point, you don’t need to get an EIN in order to correctly run your business. The reason this is true is simply because your business is you. In other words, there is no separation between you and your business. Howbeit, if you have established a separate entity, which would be the corporation, the LLC, or the partnership described above, then you are expected to acquire an EIN as a separate way of identifying who your business is.
By creating one of these entities, you have created a new legal person other than yourself who is operating the business. When a business is operated through a corporation, an LLC, or a partnership, and EIN is required in order for bank accounts to be opened, and for other important business actions to be taken. Every business owner hopes to have their business expand and grow.
4 Steps to Get an EIN in Idaho in 2023
Filling out an application to obtain a federal Employer Identification Number should be one of the first steps you should take when establishing a small business, sole proprietorship, or corporation.
While you are expected to file for an EIN if you are a partnership or corporation, sole proprietors are not specifically required to obtain an Employer Identification Number, even if you are using a DBA to operate under a name other than your own legal name. Though filing for your Federal Tax ID number might seem complex, here are simple steps to take.
Prepare the Required Information
One of the first things to do is prepare the information required by the federal tax ID application. If not, it will take far longer to complete the application, delaying your receipt of your federal tax ID number. You will need the following information:
- Legal names and legal addresses. First, you will need to gather the full legal names and legal addresses of every founding member of your business, including yourself and all your partners.
- Social security numbers (SSNs). Next, you will need to jot down their social security numbers (SSNs).
- Your business’s official name. This process will register your business with the government, so you will need to provide your official business name.
Apply for an Idaho Tax ID Online
After you have gathered all the right information about your business and its founding members, you will be able to begin the application. There are several options available to you, but the best choice is to apply online. Applying online is simpler and more convenient than any other method, and it is going to get you your tax ID much faster as well.
When you apply online, you can access the application form at any time, using any internet-connected device. This form is intuitive and easy to navigate, so you won’t have any trouble filling it out. If you have all the right information put together, it shouldn’t take much time to fill out.
Most people can complete the application in 5 minutes or less. Once you have the application filled, you should receive your tax ID via email in an hour or less. That remarkable turnaround time means you can start your business faster, and begin generating revenue.
Apply for an Idaho Tax ID by Phone, Mail, or Fax
Even though applying online is advisable for businesses, there are some alternative methods available. If you enjoy the paper work or want to leverage a paper application, you can fill one out by hand, then manually mail it in or send it in via fax.
You could also apply over the phone, answering questions with a live representative in a kind of interview. These traditional methods tend to be more of a pain to deal with and take more time. Most importantly, if you use one of them, you could be stuck waiting up to 4 to 6 weeks to receive your tax ID by mail.
There are indeed different ways to get a tax ID in Idaho, but some are demonstrably better than others. You can, for instance, apply for a tax ID through the traditional method like applying with a mailed-in paper application or over the phone.
However, irrespective of which method you choose, you will be answering the same types of questions about you, your partners, and your business. Note that it is much better to use a third-party service to apply for your tax ID online.
The online application process is much smoother and easier to follow, especially if you’ve gathered all the requisite information. It should only take a few minutes to finish your application, and once you do, you will receive your tax ID via email in an hour or less.