Starting a business is a little more complicated than simply having an idea and opening a shop. In the United States, companies must comply with several regulations and rules.
One of the most important things you’ll need to set up for your business is your taxes. Companies must follow different tax rules that non-business owners don’t usually have to worry about.
It can quickly become overwhelming. But don’t worry—no one expects you to be a tax expert overnight. There’s a reason why there’s an entire industry dedicated to helping people and businesses understand their tax obligations.
One of those tax obligations for certain businesses is having an Employer Identification Number (EIN) to do your taxes.
Before we discuss EINs, we acknowledge that we are not tax experts and aren’t providing professional advice here. This blog post will go over the basics of an EIN, who needs one, and how to apply for one.
We strongly advise roofers to consult local tax professionals for additional insights or specific requirements for their individual situations.
Let’s get started!
What Is an EIN Number?
EIN stands for Employer Identification Number. The federal government uses this number, also called a Federal Tax Identification Number, to identify businesses.
Once businesses have an EIN, they’ll use this number to file taxes.
Who Needs an EIN?
Most businesses need an EIN to file taxes. However, not all types of businesses need an EIN. Several factors determine whether you need one. For example, you’ll need an EIN if your company has employees.
You may not need an EIN if you’re a sole proprietor running a business. Most sole proprietors use their personal Social Security number to pay taxes.
The IRS has developed the following chart to help business owners determine whether they need an EIN.
If you answer “Yes” to any of the following questions, you’ll need an EIN to file taxes.
If you’re still unsure whether your business is required to have an EIN, it’s best to consult a tax professional for additional help.
How to Apply for an EIN
Once you’ve determined that your roofing business needs an EIN, you’re probably asking yourself, “How do I get one? How much will this cost me?!”
Thankfully, applying for an EIN for your roofing company is completely free. Additionally, the IRS accepts online applications for EINs. You can apply for an EIN on the IRS website here.
Have the following information handy before you start the EIN application process:
- Business owner’s name and taxpayer identification number (this could be a Social Security number)
- Business name
- Business mailing address
- Business entity type
Your EIN is used for federal tax purposes and likely won’t change over the lifetime of your business—even if you move it to a different state. However, some factors, such as a change in ownership, would require companies to obtain a new EIN.
Some states require businesses to have a state tax ID in addition to an EIN, but it varies from state to state. To find additional information in your state, find your state’s tax websites here.
When Will I Get My EIN?
If you complete the EIN online application, you should receive your EIN immediately. The IRS validates your information during the application process and issues your EIN right away.
Streamline Your Business Operations with Roofing Software
Once you have your EIN Number, you can easily sign up for JobNimbus Payments. JobNimbus helps contractors take control of their roofing company.
With helpful features like reporting, texting, and smart estimating, roofing software can revolutionize your business operations. Start a free 14-day trial of JobNimbus to learn more today.
