Running a business requires you to keep track of many different numbers, from sales to expenses, payroll, and accounts receivable. With all those figures floating around, it’s no surprise that you have a lot on your plate. Even with your other duties, understanding your responsibilities related to federal and state tax regulations is very important. But don’t feel overwhelmed — your journey into taxation education starts here.
This blog will decode the FEIN definition, explain who needs a FEIN and how to apply for one, and answer common questions.
A FEIN, meaning a Federal Employer Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States.
FEIN Example: A typical FEIN is formatted like this: XX-XXXXXXX.
But what does a FEIN number mean for your taxes?
Think of it as a Social Security number (SSN) for your business. Businesses that have employees, operate as corporations or partnerships, or file certain types of tax returns must have a FEIN.
Some states require business owners to have their own employer identification number (EIN) or employer account number (EAN) in addition to a FEIN. These numbers are vital for tracking Social Security Administration (SSA) contributions, Medicare premiums, and other tax-related information.
You should review the requirements to ensure you’re in compliance in Illinois (or any other state in which you operate).
A FEIN is mandatory for businesses that:
Certain organizations, including trusts (excluding some revocable ones), estates, real estate mortgage conduits, non-profit entities, and farmers' cooperatives also need to obtain a FEIN.
If you own multiple businesses that qualify under these criteria, each must have its own FEIN.
Changes in a business's structure or ownership typically require the company to acquire a new FEIN because the IRS must ensure that tax obligations are tracked and managed correctly based on the current organizational structure and ownership. For instance, if a sole proprietorship transitions to a corporation or a partnership is dissolved and a new one is formed, a new FEIN helps to track these changes.
However, not all modifications within a business call for a new FEIN. Simple changes like a business name alteration or a minor adjustment in business operations do not usually require a new number. Getting a new FEIN is required under specific legal conditions when an organization significantly alters its tax responsibilities or legal standing. If a company restructures itself internally without affecting its legal form — such as rearranging departments or altering management roles — this typically does not require a change in the FEIN records.
In more complex situations, such as mergers or acquisitions, whether or not a new FEIN is required often depends on the details of how the entities are combined or how assets are transferred. Under these circumstances, consulting with legal counsel or a tax professional is crucial. They can provide tailored advice that considers the specific details of the changes and the relevant tax laws, ensuring that your business complies with IRS requirements.
Whenever your organization considers any changes that might impact the company’s structure or ownership, you should seek legal advice. A qualified attorney or tax advisor can help you determine whether a new FEIN is required and assist you in smoothing the transition of your business’s tax and legal responsibilities. This approach helps maintain compliance with IRS regulations and ensures that your business’s records and tax accounts are accurately maintained.
Applying for a FEIN is free, and you can apply for one online, by fax, or through the mail.
The IRS's online application system is the quickest way to obtain a FEIN. Ensure you have all necessary information ready, as the session times out after 15 minutes of inactivity. Once completed, the IRS immediately issues the FEIN, meaning it can be downloaded, saved, and printed immediately.
If you prefer a physical application, complete IRS Form SS-4 and fax it to the appropriate number based on your location. You can expect to receive your FEIN within four business days if you provide a return fax number.
For those who do not have fax access or prefer not to apply online, mailing IRS Form SS-4 is an option. Depending on your location, you should send the form to either the EIN Operation or the EIN International Operation office in Cincinnati, OH.
For businesses in one of the 50 states or D.C., mail Form SS-4 to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
If you do not have a business in one of the 50 states, mail Form SS-4 to:
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
This method takes up to four weeks to process.
Understanding and managing your FEIN and other tax obligations can be complex, but with professional guidance from Porte Brown, a team of leading Chicago accountants, you can navigate these challenges with ease. Whether you need help filing taxes, understanding the nuances of outsourced accounting, or any other tax-related services, we’re here to assist.
Contact us today to get started and save money with expert tax services.
FEIN stands for Federal Employer Identification Number. It is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities operating in the United States.
A tax ID number generally refers to any type of number used for identification by the IRS, including Social Security Numbers for individuals, whereas a FEIN relates explicitly to businesses.
This is a question your employees might ask: where is a FEIN on W2s? A FEIN number on W2 forms is typically listed as the employer’s ID number in box B.
Generally, employers need to apply for a new FEIN when an organization’s ownership or business structure changes.
Yes. You need unique FEINs for each business you own that operates as a separate entity.
No, FEINs do not expire and do not need to be renewed.
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