What is fein?

, , Comments Off on What is fein?

FEIN stands for federal employee identification number. Some also refer to it as EIN. Those who would like to get a business license, file their tax returns to the Internal Revenue Services or IRS, or get a bank account for their business venture must first get a FEIN. This identification number is similar to a social security number, but it is for the use of business owners or entities.

Individuals who conduct business with employees or entities that is in the form of partnership or corporation need FEIN. Similarly, a business organization that has to pay tax returns for alcohol, employment, firearms and tobacco to the IRS also needs to obtain FEIN.

Anyone who is confused on whether they should get a FEIN may ask the IRS.

How to apply

Those who need to obtain a federal employee identification number have different options in getting them.

Applications can be done by phone, fax or mail. Applicants may also process their requests using the website of the IRS. Processing of applications for FEIN may take two weeks regardless of the chosen way for applying.

Getting a FEIN is free of charge and as such, those who might need to get an employee in the future can already obtain a FEIN.

The FEIN or EIN started in 1974 by the IRS in accordance to a Treasury order which required that persons and entities must have taxpayer identification when paying employment taxes. An entity that is applying for either a corporation, LLC, a partnership as well as non-profit, among others is required to have the FEIN or EIN.

Commercial banks together with other financial institutions will refuse business entities that are opening bank accounts or doing other financial transactions if they do not have this tax identification number.

Corporations without the FEIN or EIN will not be able to complete its charter as well.