If you’re unsure of what an EIN is and are curious about learning about the purpose of an EIN, simply continue reading to discover everything you need to know about EINs.
What is an EIN?
The term EIN is an acronym which stands for employer identification number as is a unique, one of a kind number which is assigned to each individual for taxation purposes.
Businesses are also required to apply for an EIN number Wisconsin and other areas all over the USA in order to pay their employees and to file their business’ annual tax returns.
What types of businesses are required to file for an EIN number? If a business files business tax returns and is registered as a partnership, a limited liability company or a corporation, they will be legally required to use an EIN on any of their taxation related documents. In many cases non for profit organizations will also be required to use a registered EIN number on their taxation documents.
Is an EIN the same as a social security number?
The simple answer is no, as an individual will have a different EIN number and a different social security number. However, both EIN numbers and social security numbers are similar in the fact that they are both used for taxation purposes.
However while EIN numbers are always assigned to individuals and businesses, social security numbers can also be assigned to large corporations, not profit organizations, government agencies, and legal trusts and estates.
If you’re curious as to whether credit issuers and bureaus can tell the difference between EIN numbers and social security numbers, the answer is yes, contrary to popular belief credit issuers and bureaus do have the ability to correctly tell the difference between a social security number and an EIN.
The history of EIN numbers:
The government first released EIN numbers in 1974 and was designed to identify individuals who were gainfully employed and were required to pay a portion of their income in taxes.
What is an EIN decoder:
If you’ve heard about EIN decoders and are unsure about what an EIN decoder is, EIN decoders are commonly found on the internet and can disclose which state a company is registered in. If an individual were to try and decode a business’ EIN code using an EID decoder.
However, an EIN decoder will not give individuals privileged information about the state which an individual lives in.
Do EIN numbers expire?
No, EIN numbers never expire and are never recycled from one individual or business to another. Once registered an EIN number will continue to remain issued to the same entity.
What to consider before applying for an EIN for a corporation:
If you’re interested in applying for an EIN for a corporation which you are at least a partial owner of, you must check whether or not your company has been legally formed. As only companies which have been legally formed can be issued an EIN number.
Hopefully, after reading the information on EIN numbers above, you now have a clear understanding about the purpose of EIN numbers.
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