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The Curious Bag
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A federal tax identification number is a number issued by the Internal Revenue Service (IRS) to identify a business. If a business has employees, files a tax return, withholds taxes on income, is involved with farmer's cooperatives, non-profits or other organizations, a federal identification number is required.
Filing Process
Businesses can apply for a tax identification number by filing out a form SS-4. The form can be obtained online, or mailed or faxed from the IRS upon request.
Taxes
If a business collects sales tax on products and services, the business is required to have a federal tax identification number.
Benefit
The benefit to applying for a federal tax identification number is that the process and number itself is simple and generally free of cost.
Warning
A tax identification number is required for every state that a business operates in. When filing for an out-of-state tax identification number, there may be a small filing fee.
Time Frame
The time that it takes to receive a tax identification number varies. The typical waiting time is two to three weeks, according to Entreprenuer.com. However, a business owner may contact the IRS over the phone to speed up the process.
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