Are you ready to get a tax ID number for your Alabama business? Regardless of what type of business entity you’re forming, there’s a good chance you’ll need to register the business and get your tax ID. Sole proprietorships, partnerships, limited liability companies (LLCs), corporations, nonprofits, and other entities may all require a tax ID, based on how they operate in the state of Alabama. In this Tax ID number obtainment guide, you’ll learn why tax IDs are a requirement, and how to get one as quickly as possible.
Steps to Getting an Alabama Tax ID (EIN) Number
- Gather Names, Addresses, and Social Security Numbers (SSNs)
- Online Application: Your Alabama Tax ID
- Traditional Application Methods: Get an Alabama Tax ID by Phone, Mail or Fax
- How Do I Get a Tax ID Number?
- How Do I Get a Sales Tax ID Number?
- I Need an Alabama State Tax ID Number. How Do I Get One?
To get a tax ID number, you’ll need to register your business with the government, which means you’ll need to fill out an application with some information on your business and its founding members. If you have this information on hand, you’ll be able to complete the application faster, and you’ll get your tax ID faster as well. Make sure you have the full legal names of all your founding business members (including yourself and any partners you have), and their legal addresses. You’ll also need to have their social security numbers (SSNs).
There are a few different methods you can use to get your tax ID number, but if you’re trying to start a business efficiently and begin generating revenue as soon as possible, it’s in your best interest to apply online. The online application is strictly better than any other method, since most of the other methods came into development before the internet was available.
The online application is highly convenient, since you can access it using any digital device (so long as you have an internet connection). It’s also easy to read and navigate; most people have no trouble figuring out how to answer the questions. If you have all the above prerequisites on hand, you should be able to complete the application in just 5 minutes.
Once done, you’ll get to enjoy the most important benefit of the online application; most entrepreneurs receive their tax ID after completing it in less than an hour. Compare that to the 4 to 6 weeks it takes to receive your tax ID by mail when you use a more traditional application method.
All entrepreneurs should favor the online application method, but there are some other methods that exist. For example, you could rely on a traditional method to get your tax ID. If you have a paper application, you can fill it out, answering the same questions, and then mail or fax it in. You could also answer the application questions over the phone, with a live representative. These methods are certainly less convenient, but the big problem is that when you use them, you’ll have to wait 4 to 6 weeks to receive your tax ID by mail.
Most Alabama businesses will need to get a tax ID number, but how are you supposed to get one? The basic approach is the same, regardless of what specific method you choose to use. To get a tax ID, you’ll register your business with the government, which means you’ll need to provide key information on your business and its founding members. The application itself will vary depending on what method you wish to use; for example, you could use the online application to fill out the questionnaire quickly and conveniently, or you could try and track down a paper application. In nearly all situations, the online application is the fastest to complete, since it can be finished in 5 minutes or less.
Next, you’ll submit the application and wait to receive your tax ID. If you use the online application, you’ll get your business’s tax ID via email within an hour of your submission. If you use one of the more traditional application methods, you’ll be forced to wait 4 to 6 weeks to get your tax ID by mail.
You may also need a sales tax ID number for your Alabama business. This is simply another name for your Alabama state tax ID number, which is different than your federal tax ID.
Your federal tax ID number is sometimes called an employer identification number, or EIN. It applies at the federal level, and is given to you when you register with the federal government. It’s a 9-digit, unique number that you’ll use for tax purposes (and on many forms of paperwork important to your business). You’ll need one if you’re going to hire employees, if your business has multiple members, or if you’re going to need a business license or permit. You’ll also need one for many financial purposes, such as for opening a business bank account or applying for a loan.
Your Alabama sales tax ID number applies at the state level, and is assigned when you register your business with the state of Alabama. You’ll need one if you’re selling taxable goods and services in the state, if you’ll owe excise taxes, or if you’re hiring employees in the state.
If you do need an Alabama state tax ID number, there are a few potential methods you could follow to obtain one. First, before you do anything else, you’ll need to have a federal tax ID number in hand. If you use the online application to get this number, you can have it emailed to you in less than an hour.
Once you have that, you can apply for your Alabama state tax ID number online as well. Other methods exist, like mailing in a paper application, but the online application is ideal. The questionnaire is straightforward and shouldn’t take you long to complete. After you submit it, you’ll get your Alabama state tax ID in just 4 to 6 weeks.