An EIN, or Employer Identification Number, is a nine-digit number that identifies your company for federal tax reasons. Determine what you need if you have a DBA.
Businesses, like people, have nine-digit Federal Tax ID Numbers, commonly known as Employer Identification Numbers, or EINs, which identify them for tax reasons. Many companies, but not all, need an EIN in order to make federal tax payments and submit returns.
But what if you do business under a fictitious name, or DBA? Perhaps you are a lone owner called henry who operates under the alias “henry’s Taco Truck.” Perhaps your company is incorporated as “VK Truck, Inc.” and operates under two DBAs: “henry’s Taco Truck” and ” henry Unlimited.”
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Do you need an EIN? And, if so, should it be for the official name, the DBA, or both?
Is an EIN required for a DBA?
To understand the link between EINs and DBAs, consider a DBA in the same manner you would consider a person’s nickname. If your name is henry, you may be nicknamed hen or vk, but you will only have one Social Security card, and it will be the name your parents gave you when you were born, henry
Similarly, you’ll apply for and acquire a federal taxpayer identification number in the name of your company. In the event of a sole proprietorship, it is the owner’s complete legal name.
It’s the name specified on the formation paperwork you submitted with the state in the event of a limited partnership, corporation, or limited liability company—in our example, it’s “VK Truck, Inc.”
This is due to the fact that an EIN is utilised for tax reasons, and your company is the entity that pays taxes. Because your DBAs are just business nicknames, you won’t need a different EIN for each one.
An EIN is not required for all companies. If you’re obliged to have one, it’ll depend on how your company is structured and what type of taxes it pays.
Is an EIN Required for My Business?
The IRS needs an EIN if your company is a corporation or a partnership. Depending on how they are taxed, limited liability corporations may need an EIN. LLCs do not have their own tax classification, but they are taxed in the same way as other forms of organisations.
An EIN is required if your LLC is taxed as a partnership or a corporation.
Furthermore, if a company has workers, pays employment or excise taxes, has a Keogh plan, or meets any of the other conditions stated on the IRS website, it must get an Employer Identification Number.
Sole proprietors and single-member LLCs with no workers and no excise taxes are exempt from obtaining an EIN. Instead, they may utilise their Social Security numbers.
Many company entrepreneurs, however, discover that they must an EIN in order to establish a bank account, receive a credit card, obtain business permits, or pay state or local taxes. Others get an EIN in order to avoid utilising their personal Social Security numbers for commercial purposes.
Obtain an EIN for a DBA.
To get an EIN, you must fill out a form and submit it to the Internal Revenue Service. You will fill out the form with information about your company, such as how it is organised, the number of workers, and your main business activity.
There are various methods to get an EIN. The free IRS online application is the quickest. After completing and submitting the form, you will obtain your EIN instantly. You may also fill out form SS-4 and fax or send it to the IRS. If you apply by fax, you’ll have your EIN in four business days. It might take up to four weeks if you apply via mail. International applicants may only apply for an EIN over the phone or via the mail.
The procedures for getting a Federal Employer Identification Number are the same whether you conduct business under your legal company name or as a DBA. Applying is free and simple. And, even if you have many DBAs, you’ll only need one number.