There’s a lot of paperwork related to starting a business, and one of the most important things to do is file for an FEIN. If your business doesn’t have an FEIN, you will not be able to pay taxes, hire employees, open bank accounts or do many other vital tasks. Here’s everything you need to know about FEIN numbers, from what they are to how to get them.
Steps to Applying for FEIN Numbers
- What is an FEIN number?
- Is the FEIN the same as a tax ID?
- What is the between an EIN and an FEIN?
- What is an FEIN number used for?
- What is the difference between an FEIN and an SSN?
- How do I get a FEIN number?
A Federal Employer Identification Number (FEIN) is also known as a Federal Tax Identification Number, Tax Payer Identification Number or Employer Identification Number. It’s the same number, but it has a lot of different terms depending on what it’s being used for. When it’s being used to hire employees and pay payroll taxes, it’s known as an Employer Identification Number. When it’s being used to pay federal taxes, it’s known as a Tax Identification Number. Either way, while it identifies a business to the federal government, it’s also used to identify businesses to banks, creditors and other financial institutions.
Not always. An FEIN specifically refers to a federal tax ID. When someone refers to a tax ID, they may either be referencing the federal or state tax ID. When a tax ID is requested on federal tax forms, it will be the Federal Employer Identification Number or the Federal Tax Identification Number. State tax IDs need to be filed for separately based on the state in which the business is operating.
Further, a Federal Tax Identification Number (FTIN) shouldn’t be confused with an Individual Taxpayer Identification Number (ITIN).
There’s no difference between an EIN and an FEIN, they’re just different ways to refer to the same thing. An EIN is an Employer Identification Number, while an FEIN is a Federal Employer Identification Number – it’s just a matter of phrasing. Both an EIN and FEIN are used to identify employers when they are hiring employees and paying payroll taxes. They are also used when paying federal taxes and for financial applications.
An FEIN number is used for a substantial number of things. FEIN numbers serve the purpose of identifying a company to the federal government, but they are also used very much like Social Security numbers. This also means that an FEIN number is frequently used to identify businesses to financial institutions.
An FEIN number is likely to be used for:
- Opening bank accounts. An FEIN number is used to identify your business to a banking institution, and without it, you won’t be able to open a bank account. FEIN numbers are also how banks often track whether your business has been responsible with checking and savings accounts in the past, as it is used to establish your business credit.
- Filing federal taxes. When filing federal taxes, an FEIN number is used to identify your business to the government. Your FEIN number is necessary to file federal taxes. If you do not file your federal taxes in time, you may face substantial fines and penalties.
- Filing payroll taxes. When paying payroll taxes, an FEIN number may also be referred to as an EIN or an Employer Identification Number. An FEIN will be used when paying federal payroll taxes.
- Hiring employees. To properly hire an employee, a business needs to send in forms identifying the employee and the business. An EIN may be used for applying for working visas on behalf of employees, as well as other administrative tasks.
- Applying for permits and licenses. Many businesses need to apply for permits and licenses in order to operate, such as alcohol or food-related licenses or construction-related permits. Permits and licenses are generally identified through the use of an FEIN, and without an FEIN, a business won’t be able to apply for them.
- Acquiring business loans. As mentioned, business credit is often established through the use of an FEIN, similar to the use of a Social Security number. Acquiring business loans and acquiring business lines of credit will often require an FEIN. The company’s credit history will then be attached to that FEIN from then on.
Without an FEIN, a business won’t be able to perform these functions. An FEIN needs to be one of the very first things that a company acquires for these reasons.
An FEIN is used to identify a company, while a Social Security number is used to identify a person. Other than this, the concept of an FEIN and a Social Security number are very similar. An FEIN is used like a Social Security number for the government to identify and track businesses. When taxes are paid or filed, the government uses the FEIN to identify the taxpayer. Even sole proprietors will need an EIN to hire employees, even if they and their business appear to be the same entity.
You can get an FEIN number through multiple channels: online, mail and fax. Getting an FEIN number through the mail can take a matter of weeks, and getting a number through fax could also take multiple days. Through the internet, it’s possible to get an FEIN number within an hour. Due to the importance of an FEIN for a business, it’s usually desirable for an FEIN number to be acquired online.
An online filing service can help you get an FEIN number with a fast, simple application process. Once you receive your FEIN, you can immediately begin to use it. Every business is going to need an FEIN for important tasks such as opening business bank accounts, getting business loans and hiring employees.