Before you start a business, legally, you need to obtain any business licenses or permits required by law. Doing so will identify your business, protect public health and safety and help you keep track of your finances for tax purposes. The application for an EIN) is available at the IRS website; an EIN is required for corporations, LLCs and partnerships, as well as any sole proprietors who will hire employees.
Unless your company’s service or product is regulated by a federal agency, you probably won’t need any federal licenses or permits. However, things like public transportation, investment advice, or producing drugs or firearms, require supervision by a federal agency and you will need special licenses. If, for example, you will become involved with environmental regulations at the federal level, you’ll need to deal with the EPA.
State Business Licensing Laws States license people in certain professions, such as lawyers, doctors, and accountants. Your state might also require a license for certain other businesses such as barbers or real estate agents. You should check with your state to find out if your business requires a state license or permit. Selling certain products including alcohol and lottery tickets might also require a state license.
Your municipality might require a license or permit for your business. Check with your city or town to find out about zoning laws to ensure that you are allowed to conduct business in a particular building like your home or the storefront you rent. If you are committed to retail sales, you will also have to pay state and local sales tax. Depending on your city, this could be done at the state level or both the city and state levels.
If you need to get an Employer Identification Number for your business you can apply in any of the following ways:
Apply Online – Companies can apply for their EIN number by using the EIN online service. Customers simply need to go to the EIN online website and fill out all the required fields on the application form, perform a simple and preliminary validation and then submit the correct SS4 form.
Once the IRS has checked it for all the correct information, an EIN will be issued. Note however that not all business entities can apply online so read through the website before applying.
Apply by Mail – If you prefer to do things the old fashioned way, then you can still send in your EIN application by mail. The turnaround on an EIN application by mail is about four weeks, and again, you need to make sure that the SS4 has been filled out very carefully with all the required information.
If it is decided that your business needs an EIN, it will be mailed back to the number included. Applying by mail will take about four (4) weeks. You will still be required to download and fill out all the required information for a Form-SS4.
Apply by Fax – You can also fax your completed SS4 form to your IRS state fax number once you have ensured it is correctly filled out. If everything is OK with the SS4 and it is decided to allocate you an EIN, then it will be faxed back to you.
This process will take up to four (4) business days, and it is suggested that you do not send a fax and call the toll-free number to avoid a duplicate EIN being assigned. You will still get to fill out all of the required information in the Form-SS4.
The number to fax to varies by states. The fax number is available 24/7, and you should include your own information as the IRS will fax back your EIN.
Apply by Phone – Lastly, you can also apply for your EIN by phone. This is the route most taxpayers choose as it is very quick. You simply call a toll-free number (800-829-4933) between 7:00 am and 5:00 pm local time and an operator will take down your details and if everything is in order, will give you the number there and then over the phone.
Those that have been assigned an EIN as a Household Employer must also use that number for their sole proprietor needs as well. The IRS uses that number to know taxpayers who are required to file several business tax returns.
Company employers, non-profit associations, trusts, sole proprietors, the corporations, partnerships, estates of decedents, federal agencies, particular individuals, and other enterprise entities all use EINs. However, the EIN does not replace your personal Social Security Number and should only be used for business transactions. In some States
Avoiding Common Mistakes
If you wish to elect to be taxed as an S corporation, you must file Form 2553, Election by a Small Business Corporation (Under Section 1362 of the Internal Revenue Code). An association, limited liability company (LLC) or other organization that elects to be taxed as a corporation must file Form 8832, Entity Classification Election.
Remember always to include your SSN, EIN, or ITIN on Line 7b of Form SS-4. Always use the full legal name you entered on Form SS-4, line 1 and the EIN given to you, consistently on all business tax returns you file with the IRS. If you change your address after you receive your EIN, you must use Form 8822, Change of Address, to notify the IRS of the new address.
If you change your business name after you receive your EIN, write to the Filing.Solutions at the address where you file your tax return. An authorized person must sign the request to change your business name. Additionally, partnerships and corporations must include a copy of the Articles of Amendment that were filed with the state that authorized the name change.
If the U.S. Postal Service doesn’t deliver mail to your street address and you have a P.O. Box, show the P.O. Box number as the entity’s mailing address instead of the street address.
Applying for Individual Taxpayer Identification Number
Individual Taxpayer Identification Number (ITIN) is a 9-digit number that must be furnished on all returns, statements, and other tax-related documents in case the person does not have a Social Security Number (SSN). Aside from tax payments, an ITIN can also be used to access financial services.
Some banks may take the ITIN as part of your identification when you apply for a bank loan or credit card. However, there are constraints to the use of an ITIN from a legal standpoint. The ITIN cannot replace a Social Security Number (SSN), especially when it comes to working rights. The placement of on ITIN on work documents constitutes fraud.
To detail it further, all nonresident alien individuals who are to get the benefits of a reduced rate of withholding under an income tax treaty or nonresident aliens who need to file U.S. tax return only to claim a refund (in absence of SSN) or nonresident aliens who will be filing joint tax returns with a spouse; the spouse being a U.S. citizen or resident alien, require an ITIN.
Even the U.S. resident aliens who are not eligible to get SSN, require it to file federal tax returns. So does an alien individual who is being claimed as a spouse for exemption on a U.S. tax returns, in a case of him or her being non-eligible for SSN.
ITIN is mandatory for all such alien individuals who are claimed as a dependent on another person’s U.S. tax return and for nonresident alien students, professors, or researchers filing a U.S. return. Nonresident students, professors, and researchers require ITIN while claiming an exception to the tax return filing requirement as well.
Whatever category you fall in, two fundamental things remain same –
1. ITIN is generally issued to people who aren’t eligible for SSN; an individual in no case can have both SSN and ITIN.
2. ITIN is issued primarily for federal tax purposes only. It does not entitle you to any social security gains or for earned income credit. However, it is now accepted as identity proof while opening an interest-bearing bank account.
The ITIN issued to a person expires after 5 years if he or she fails to file a federal income taxes return in all these years. In such a case, one can reapply and get their ITIN renewed.
One can apply for ITIN by mail or in person at designated IRS Taxpayer Assistance Centers in the United States. There is one benefit of applying in person as all the documents attached get reviewed and returned to you while applying only. ITIN has played a key role in bringing the taxpayer in US economy. Realizing the significance of ITIN, the federal government has authorized some individuals, businesses or organizations as Certifying Acceptance Agents (CAAs). These CAAs are meant to help the taxpayers in their ITIN application process.
So if you happen to be one such person in above category, make sure that you seek help from an online ITIN filing assistant to get your ITIN before filing the tax returns. In a case of any difficulty, look for some
online ITIN filing assistant near your area to assist you.
Durable Power of Attorney
One of the hardest to solve problem in trust and real estate business is when a member of the family who holds the sole ownership of their business, for example, the head of the family become incapacitated without any legal forms. This can prevent any member of the family to handle all transactions of activity s as well as financial transaction within the business. It can lead to great business turndown if not deal with the family as soon as possible.
Unable to process a legal document that would give authorization to any member of the family is such a big and expensive problem.
Although it can send nervous to the owner giving special authorization to a member of the family over his or her finances, without this very important document, the entire family will face a huge and complicated problem.It is also very expensive to process a guardian court appointed for him.One effective thing that you can do is to process the paper secretively without letting the person know that you are giving a special power if attorney.
This can free your mind from worry that this family member might execute his or her authority even if you are competent enough to handle all real estate forms and transaction within the business.
Luckily there is another document that can help you solve this kind of problem and this is called the durable power of attorney for finances. This kind of power of attorney means that this will result in effect right after the owner is incapacitated. That is the only time when to authorize individual can be di his or her duty within the company as a representative.
In the case of an owner and tenant problem, you have to make a decision still consulting the landlord even if he or she as long as the owner is mentally incapacitated. For the representative, they should review all necessary forms within the business such as landlord forms. This is to identify any violation that is being made by the tenant. The representative should have knowledge about the in and out of the entire real estate business.
The member of the family that is commonly given by a durable power of attorney is children or the other half of the owner. It is good to have an attorney at your side to review all necessary documents. Preparing this kind of form is very simple and less expensive that can spare you from untold distress. Every adult with a business should consider having the same for which is the durable power of attorney. It is not too early to prepare this kind of authorization since you will never know what will happen in the near future. You have to expect the unexpected to prevent future business downfall.
Part of the legalization process is the fact that only original, notarized power of attorney forms will be accepted for legalization. They have to be notarized and have all relevant documents included. One of these documents that are needed to a corporate power of attorney form is the Certificate of Incumbency. This confirms that the company officer that is granting the power of attorney has the authority to do so on behalf of the company.
Filing.Solutions provide state and federal personal, business, trust and estate filings online. They help individuals to obtain ITINs through an easy process to apply for ITIN, offer online assistance to those applying for a Federal Tax ID Number and provide a platform online for generating a durable POA (Power of Attorney). They also render expert guidance in all matters related to tax preparation, accountant, and business consultation. You can chat with a support specialist at any time of the day at https://filing.solutions.