Everything is set for you to begin a new business. Just when you think that all the paperwork is done, the EIN hits you hard on the face, especially that you need to know how to apply for EIN in Colorado. If you are working with employees, or belong to a partnership or corporation, you need this number. The EIN is a unique digit number with the fourth and fifth number having a 70 to 88 digits. This is given by the IRS for purposes of identification and to file tax returns.
So the EIN is definitely needed especially for new businesses. If you are a sole proprietor working on your own, you are not required the EIN, but it can be a good idea to have one, just in case you need to open a bank account, get licenses or submit legal documents.
To know when you need one, below is how to apply for EIN in Colorado:
- When you have employees working for your business
- When you buy an ongoing business
- When there is a change of organization type like sole proprietorship to partnership or corporation
- When you intend to hold various bank accounts
- When you have a legitimate retirement plan
- When you file tax returns for employment, excise and alcohol, tobacco and firearms.
A specific business will have one EIN which is permanent and cannot be transferred to anyone else. It is like the social security number where it is specific for one individual.
How to apply for EIN in Colorado will need you to access the IRS website and download the Form SS-4. You can possibly accomplish and process the form through phone, fax, mail or online. It requires no application fee and will take around two to four weeks of processing. So you need to wait patiently for your tax ID number.
Once you have already applied for the EIN, you can indicate the “Applied for” and the date of the application on the space shown for the EIN. Never indicate your social security number as substitute for the tax ID number. You can then process your tax return; however, you need to send it by mail or fax.