As you have been doing your research you probably have seen the words “IRS”, “EIN”, “tax-ID”, “LLC”, IRS EIN lookup, and many other acronyms and words used over and over again, but you still may be unclear about what all of that is and what it means. This is a quick guide to help you understand some of those terms, and why they are important.
IRS and EIN
IRS stands for the Internal Revenue Service. They are the government organization that works with the federal government of the United States of America who collects the government’s portion of all the monies made and incurred throughout the year. They get these monies through taxes, which people and business owners have to file and pay every year typically throughout the year.
Every person born in America receives a social security number from the government department the Social Security Administration (SSA). Like the SSA hands out social security numbers to a person, the IRS hands out Employer Identification Numbers (EIN) to a business. Even in states that have additional processes like North Carolina, you will still ultimately get your EIN from the IRS, but you will also get an NC tax ID number from the state.
Tax-ID is simply another name for the EIN. They call it that because that is essentially what it is; a way to identify you or your business for tax purposes.
There are various types of business structures from a Doing Business As (DBA), Limited Liability Corporation (LLC), Incorporation (Inc.) and several others. Learning the difference and deciding which structure is best for your business will help you know what you need to file.
Going through the IRS-EIN-Tax-ID process does not have to be a difficult one. Using a knowledgeable filling service can help you understand exactly what you are doing.