A federal tax ID number is part of the IRS system of identifying your business entity. The agency has specific guidelines for who must acquire tax ID numbers. To fully comprehend the purpose, function and guidelines of federal tax ID numbers, your staff will need to understand the IRS federal tax ID numbers key terms for businesses.

For tax purposes, there are several categories of business entities. Which one identifies your company helps determine the need for an employer identification number. That's important because not all of types of business need a federal identification number. And for the self-employed, different guidelines apply. To develop a working federal ID number vocabulary, start with the following steps.

1. Find tax ID number information, such as key terms and their meanings.

2. Determine your business entity type and whether it needs a federal ID number.

3. Conduct a federal tax ID number search to locate additional information.

Action Steps
The best contacts and resources to help you get it done

Search online to learn federal identification number terms

The Internet is a great place to get up to speed with all the tax ID lingo you'll need to know. You can also obtain help and information concerning how to get a tax ID number.

I recommend: Start your education on tax ID numbers and related terms by viewing the Tax/Law glossary at TaxHelpers.com. Or, read MSN Money's simple definition of EINs and all related financial terminology in its online glossary.

Identify the types of businesses that require federal tax ID numbers

Use the information about business types to decide whether you need a tax ID search to determine whether your business has a number or needs to apply for one. Your staff will find definitions and detailed information about employees, international businesses, business expenses, retirement plans and much more.

I recommend: Check the A-Z Index for Business on the IRS website to learn the definitions for various business types. LLC.com clearly defines the term EIN and its parameters in the FAQ section.

Apply your understanding of employer identification number key terms

There are several layers of information available about businesses and federal tax ID numbers. For example, if your company is a partnership, you can find a definition of partnership as well as information about annual return of income and various business taxes. Review the details to fully understand the key terms that apply to your business entity.

I recommend: Read the information about partnerships (or corporations, LLPs, S corporations or sole proprietorships) for a thorough understanding of tax implications by business type at the IRS site. Access the FAQs at BizFilings to clarify any concepts you're unclear about.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Familiarize your staff with IRS information about operating a business. In addition to an explanation of tax ID numbers, it provides guidelines for record keeping, business name changes and business expenses.
• •  The employer identification number (EIN) is not the only Taxpayer Identification Number issued by the IRS. Others include the individual taxpayer identification number (ITIN), the taxpayer identification number pending U.S. Adoption (ATIN) and the Preparer Taxpayer Identification Number (PTIN). You can learn about all of them at the IRS website.

An Employer Identification Number (EIN) is the federal tax ID number used by the Internal Revenue Service to identify your business. EINs are also known as Federal Tax Identification Numbers, and they are like a Social Security number for your business.

You must obtain an EIN if any of the following apply to your business:

1. You have employees.
2. Your company is organized as a corporation or partnership.
3. Your company offers a Keogh retirement plan.
4. You file one or more of the following tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms.
5. You withhold taxes from a non-resident on income other than wages
6. You are involved with certain forms of trusts, non-profits or farmers cooperatives, as defined by the IRS.

The steps below will assist you in obtaining an EIN for your company if one is required.

Action Steps
The best contacts and resources to help you get it done

Use the quick and easy online EIN application form

It's available from the IRS

I recommend: Apply online now if you already know you need an EIN.

Determine whether your company is exempt from the EIN requirement

Not all companies are required to obtain an EIN. For example, the IRS says you needn't file if you change the name of your existing company, move it to a new location or add a location or even if you operate multiple businesses. Some states may still require a state EIN number.

I recommend: The IRS booklet 'Understanding Your EIN' will familiarize you with EINs and whether you are required to obtain one. Familiarize yourself with the instructions for filing IRS Form SS-4 and requesting an EIN. Check your state to find out if the states where your business operates require some form of EIN or charter.

Discover if your company needs a new EIN

EINs typically do not change throughout the life of your business, except when a significant change to your company occurs, such as: (1) filing Chapter 7 or Chapter 11 bankruptcy; (2) incorporating your business; (3) adding partners and organizing your business as a partnership; (4) taking control of an existing company by buying or inheriting it, and organizing that company as a sole proprietorship.

I recommend: For up-to-the-minute information on filing online for an EIN, go to the IRS's Do you need a new EIN Web page. Also see their frequently asked questions.

Apply for your business EIN

It's a simple process you can do by phone, fax, mail or (best of all) online.

I recommend: To apply by phone, call the IRS Business & Specialty Tax Line at (800) 829-4933 and speak with a representative. You can also download and complete form SS-4, Application for Employer Identification Number, then mail or fax your application, based on the state where you live. Or, alternately, find out the process for filing an online application. Avoid the most common reasons online filers face delays or rejection of their applications. Online filing is not applicable to foreign-based companies and certain others; see if your company may not file online.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  EINs may only be used for business activities and are not a substitute for a social security number.
• •  If you utilize the services of a taxpayer representative, that individual or firm can request an EIN on your behalf.
• •  Certain companies may not file their EIN application online. For assistance call (800) 829-4933 inside the U.S., or (215) 516-6999 from outside the U.S.
• •  Check the status of a mailed EIN application or verify an EIN number by calling (800) 829-4933.

The IRS uses the federal tax ID number, or employer identification number, to identify your business. Your business needs a federal ID number if it has employees, is a corporation or partnership, files special tax returns, withholds taxes from non-residents, provides a Keogh retirement plan or works with certain trusts, non-profits or farmers cooperatives, your business will need a federal tax ID.

Getting a tax ID number is a relatively easy process. Simply learn the federal tax ID numbers basics, collect your documentation, and then follow the steps for acquiring federal tax ID numbers at the IRS website. If you have any questions about whether or not your business needs to apply, be sure to contact the IRS directly. As you prepare to apply for federal tax ID numbers for your company, take the following steps:

1. Review the IRS Information to determine whether your business needs tax ID numbers.

2. Investigate the steps for getting a federal tax ID number.

3. Submit an application for an employer identification number (EIN).

Action Steps
The best contacts and resources to help you get it done

Check the qualifications for a federal identification number

Remember that your business might not have to obtain a federal tax ID number, so check the requirements. Internal Revenue regulations regarding which businesses do and don't need one are quite specific. The parameters are listed in a chart. Your business needs a federal identification number if any items on the chart apply. For a more detailed explanation, download the pdf 'Understanding Your EIN.' If your recently acquired your business, be sure to check whether you need a new EIN.

I recommend: See the "Do You Need an EIN" section at the IRS website for the basic rules and read the information in "Do You Need a New EIN" to determine whether your business needs to reapply. If you'd like help with the process, several businesses such as FederalTaxId will assist you for a small fee.

Identify the methods for obtaining a federal tax ID

Your company can acquire federal tax ID numbers in a several ways. The Internet EIN application is the IRS preferred method. You also can apply through a toll-free telephone number, fax or mail. In all cases, finalize Form SS-4's Third Party Designee section before submitting your application.

I recommend: Access "How to Apply for an EIN" at the IRS website. For companies classified as International Businesses, study the additional regulations also at the IRS site. You can also go through the International Chamber of E-Commerce.

Secure your federal ID number

Once you've determined that your business needs an employer identification number and you've reviewed the options for getting one, it's time to apply. Call the IRS Business & Specialty Tax Line at (800)829-4933 to apply by phone or for any questions. (Note that international applicants must call (215) 516-6999, which is not a toll-free number).

I recommend: For immediate service, apply online with the IRS. Follow the simple steps to provide and verify information, and receive your EIN. If you'd rather apply by mail or fax, print and fill out Form SS-4 and the Application for Employer Identification Number and send them off. Be sure to check "Where to File" for the correct address. BusinessNameUSA.com will apply for your federal ID and any other documents your business needs.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Conduct a tax ID search to find tax ID number information. This allows you to discover if a business has a federal tax ID number or verify one. If you recently acquired your firm, this might be your first step.
• •  One other aspect of federal tax ID numbers basics is to check IRS rules and recommendations about getting a new federal ID number for an existing business. In general, unless there has been a major change in the business, it will keep the same number.
• •  You can check the status of your faxed or mailed federal tax ID application by calling (800) 829-4933.

A federal tax ID number can be a critical part of running your small or large business, so making sure that you have filled out the proper paperwork or gone through the appropriate online steps is key to filing correctly. There are also now a large host of online resources that can easily help you to run a tax id search if you are trying to do background information on a business that you are planning to work with.

Government websites are generally the best place to start looking for information on tax ID numbers since they the portal of information for the agencies overseeing this part of the government. Other sites may give you information, but government sites can be your most trusted since they are impartial to any outside influence.

To find out more about tax ID numbers and regulatory info:

1. Start slow with general info on federal tax ID numbers laws and regulations.

2. Ease into how to get a federal tax id number and how to run a tax id search.

3. Take advantage of additional resources on tax ID numbers and other tax information for small businesses.

Action Steps
The best contacts and resources to help you get it done

Begin with general information on federal tax ID numbers laws and regulations

Immerse yourself slowly into federal tax ID numbers laws and regulations by starting with the organization that oversees the regulation of your taxation. By understanding who is collecting your money and why, you will gain a better insight into why policies are put into place.

I recommend: Start with federal tax law information from the Internal Revenue Service (IRS). Learn about Internal Revenue Code (IRC) as well as Treasury (Tax) Regulations. The IRS has helpful resources on federal identification number details and federal tax information for businesses. Their resources include guides, compliance information, programs, processing and additional tax information.

Look at tax ID Numbers for businesses required to file tax returns

Groups such as corporations, partnerships, nonprofits, sole proprietors, government bodies, churches, trusts as well as estates are required to file tax returns and have a federal id number for their taxes. Discover how to get a federal tax id number as well as how to run a tax ID number search.

I recommend: Learn about obtaining an employer identification number (EIN) from the United States Department of Labor. An EIN can also be referred to as also a "Federal Employer Identification Number" (FEIN) or a "Taxpayer Identification Numbers" (TIN). Run an EIN tax id search through the US Securities and Exchange Commission's Electronic Data Gathering, Analysis, and Retrieval system database (EDGAR).

Find additional government resources to help you wade through tax ID numbers and regulatory info

Take advantage of the wealth of additional government hosted websites to assist you with your federal identification number questions or to help you find tax id number information on another business. These resources are put in place for the general public, and you are encouraged to use them.

I recommend: Business.gov has a wealth of business tax information on a variety of topics, resources and publications. The United States Small Business Administration offers Finance, Capital & Taxes Regulatory Comments on a large spectrum of subjects.