There are plenty of ways to get your partnership off the ground. When you are trying to make the process run smoother, make sure you have the proper paperwork completed. Knowing how to complete your Tax ID application can help you get an EIN number quicker.
What to do When Applying for an EIN Number
The Partnership Tax ID number is a nine-digit number that is used by the IRS to help identify the business as a tax-paying company. The partnership is a business entity that is required for a Tax ID or EIN. If the partners own one business, one EIN is needed.
The Federal EIN number application can be simple, if you know what goes into the process. To apply for an EIN number, you simply need to have a partnership located within the United States. You will want to make sure the application is completed in one sitting, and there is no inactivity that will time you out of the session.
How to Get Your Partnership Off the Ground Quicker
A partnership only needs to have one EIN. The EIN is important because the business needs the number to not only secure capital, but also file taxes every year. To complete an EIN application, you simply need the date the business was started or acquired or an address.
Partnerships use what is called pass-through taxation, meaning the partners claim profits and losses on individual tax returns. The profits and losses are reported on Schedule 1-K, which tells how much a partner will pay on their tax return.
Getting an EIN or a federal Tax ID number is the perfect first stop when it comes to starting your partnership. Completing the application can be done quickly, and you will often have an answer right away.