The Federal Tax Identification Number is also known as the Employer Identification Number (EIN). It is a nine digit number assigned by the Internal Revenue Service (IRS) to identify tax accounts of employers and certain others who have no employees. In the past you had to file a Form SS-4 but the entire process can now be done free online by going to the IRS website. After typing in (keyword "EIN") you will find the EIN application in an interview style format. It is important for sole proprietors to know that you may only have one EIN, no matter how many different businesses you operate.
Those that have been assigned an EIN as a Household Employer must also use that number for their sole proprietor needs as well. The IRS uses that number to identify taxpayers that are required to file various business tax returns. Employers, sole proprietors, corporations, partnerships, non-profit associations, trusts, estates of decedents, government agencies, certain individuals, and other business entities all use EINs. However, the EIN does not replace your personal Social Security Number and should only be used for business transactions.
It was very common for a provider to have begun their practice years ago and to have started out billing under their social security number. Many did this because it was just easier. They figured they could switch over to an EIN# number later on, when their practice was bigger. The problem is that switching from a social security number to an EIN number is not a simple task and it usually freaks your accountant out. Actually, the problem is that the accountant doesn't understand that it is a problem with the insurance carriers and they switch them over without advising them. The accountant tells the provider it's no big deal to switch, when it is.
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Steps To Form An LLC
State-by-state variations in LLC regulations make it crucial that you are familiar with the legislation of your particular state before moving forward. It essentially boils down to these five fundamental steps:
Choose a Name for Your LLC
Select a Registered Agent
File the Certificate of Formation/Articles of Organization
Hire an Operating Agent
Apply for the EIN
In the United States, a limited liability company (LLC) is a type of corporate structure that shields its owners from being held personally liable for the obligations of the firm. It ensures liability protection and differentiates a business entity from an individual. Creating a limited liability company could seem difficult and overwhelming, but if you know how it operates, it can actually be rather simple. We break everything down in our thorough guide to forming your own LLC. So, you may comprehend everything there is to know about how to begin an LLC and proceed as quickly and successfully as possible.
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