An Employee Identification number (EIN) or tax ID is essential for setting up of business organizations. It is a unique identification number that is allotted by the IRS and helps in the easy identification of business organization for the purpose of tax filing. The EIN number is required for many other important tasks like obtaining the necessary permits and licenses to operate the business, opening bank accounts, paying sales and user taxes and also for the payment of income tax.
All the businesses who hire employees in Ohio are required to have an Ohio EIN. All the different business organizations like sole proprietorship, partnerships, trusts, estates, church and other religious organizations, LLC, S Corporations are required to possess a tax ID number.
Most of the businesses, which do not require an Ohio EIN, are also opting to apply for the tax ID number because of the benefits it offers. Some of the benefits of having a Tax Id
- Protects Social Security Number – An Ohio EIN will help the owners to protect their social security number. Business owners are required to provide their social security number in the absence of an EIN. Giving SSN is risky as the personal information is vulnerable for identity theft. The EIN does not have any personal information and is used only for identification of business; hence business owners are safe using an EIN.
- EIN is legal requirement – Most of the business organizations require possessing an EIN to carry on their business. It is required to conduct many activities like hiring employees, paying taxes, collecting payroll tax, applying for other licenses and opening bank accounts.
Other than the above benefits, an EIN is also required to get business credit from banks, to establish retirement and trust plans, to purchase other businesses for the purpose of expansion and for all the tax related matters like filing tax returns and paying income tax.
The process of obtaining an Ohio EIN is very simple. You can file the application on the website of IRS or engage a consultant to take care of the whole process. The application form requires simple details like the legal name of the business, physical address, names of responsible parties and valid Email id and phone numbers.