Need to open a bank account as a US nonresident trader and complete your company’s federal filings? An EIN number is important for your federal tax filing as a non-resident business owner. In the United States, it can be difficult to start a business as a non-resident, but it can be more beneficial for you.
Some of the biggest companies, like Apple, Microsoft, Facebook, etc., including e-commerce, retail, and other businesses, are based in the US. But if you are not a U.S. citizen, it can be even harder.
Getting an EIN is one of the first things you need to do to start a business in the United States. The good news is that people who are not U.S. citizens can get an EIN, which can help them in many ways. such as filing your tax return, opening a business bank account, hiring employees, and many more.
So, how do you get an EIN for non-resident aliens? No worries, let’s talk about how non-U.S. residents can get an EIN successfully and why it can be a good move for your business.
What Is EIN?
An EIN is a Federal Tax ID number that most businesses in the United States require when forming a business, whether they are residents or non-residents. You can say that an EIN or Employer Identification Number is a nine-digit number that the IRS (Internal Revenue Service) gives to a business so that it can be identified.
EIN is a number that identifies a business and is used for tax purposes in the US. Generally, it is provided to businesses like corporations, LLCs, partnerships, and sole proprietorships. But trusts, estates, or non-profit organizations can also use this number. Using an EIN instead of the business owner’s Social Security Number is a good way to protect your identity.
Why Do You Need an EIN (Employer Identification Number)?
An EIN is required for every US-based business. The federal government gives this number to every business so that the IRS can easily identify each business for tax purposes. If the government approves your business, you can apply for an EIN. Basically, the IRS wants to keep records of your business income taxes and collect the taxes you need to pay.
If you do not have an ITIN (Individual Taxpayer Identification Number) or SSN (Social Security Number), your EIN will be utilized instead. However, you may apply for an EIN without SSN.
Also, if you want to start a dropshipping business in the U.S. from another country, you’ll need an EIN if you don’t already have an ITIN or SSN.
Here, you will find a few reasons why an EIN is the most important part of your business:
Hiring Employees
When you hire employees to work for you, you need an EIN to file taxes and pay employment taxes.
Setting up a Business Entity
If you want to file a business tax return as a corporation, partnership, LLC, or sole proprietorship with employees, you need an EIN.
Opening a Business Bank Account
Once you get your EIN number, you can open a bank account for your business. It also keeps your sole proprietorship’s taxes simple by opening a bank account with an EIN.
Applying for Business Licenses
When you apply for a business license, certain states and local governments demand an EIN.
Applying for Business Loans
Lenders may require an EIN to verify your business’s identity when you apply for a business loan.
Doing Business with Certain Entities
Some businesses and government agencies require an EIN before doing business with you.
What Is the Difference Between EIN VS. SSN VS. ITIN
The IRS gives out three types of federal tax ID numbers:
- EIN (Employer Identification Number).
- SSN (Social Security Number), and
- ITIN (Individual Taxpayer Identification Number).
But the criteria for who can get them are totally different.
EIN (Employer Identification Number)
When a business owner wants to do business in the United States, they must need an employer identification number if they have neither an ITIN nor an SSN.
For the following purposes, EIN is usually used:
- Filing tax returns.
- Opening a business bank account.
- Separating personal finance from your business.
- Hiring any employees.
SSN (Social Security Number)
The Social Security Number is one of the Tax ID numbers that can only be given to a citizen or resident of the US. Foreigners are not allowed to have an SSN.
ITIN (Individual Taxpayer Identification Number)
ITIN is a taxpayer identification number for individuals who must pay taxes in the US. But they are not eligible to get an SSN number.
Does Your Business Need an EIN?
How do you know that your business needs an EIN? First, you must understand the importance of an EIN number. You know that an EIN allows the IRS to track payments your business makes to its employees. Basically, it is almost a social security number for your enterprise.
You know, in general, business entities like LLCs, corporations, and partnerships need an EIN number. In this case, you should know what type of business structure you have. Then, you can apply for the EIN.
Corporations & Partnerships
A corporation is a type of legal business structure that is formed by filing documents under state law. This is also called “incorporation.” All C and S enterprises must apply for an EIN number. Usually, the owners of a corporation are called stockholders. When articles of incorporation are filed, a corporation is created. A corporation is a business that is legally distinct and whose stockholders are its owners.
Besides that, in a partnership, each co-owner shows their share of the business’s income and losses on their own tax forms. When two or more people want to start a business together, they form a partnership.
Sole Proprietors
If you run your business as a sole proprietor and fit into one of the following categories, you do not require an EIN:
- You won’t run a business eligible for federal excise tax collection.
- You do not plan to hire employees.
If you meet the above conditions, you can use your SSN number. On the other side, you must have an EIN number if you want to open a business bank or loan account for your business. In this case, you can also apply for EIN without SSN. It is noted that you will need an EIN for your tax documents if you plan to hire anyone in the next 12 months.
Limited Liability Corporations
In the United States, an LLC is a legal entity that protects its owner’s personal assets. when their businesses claim debts and other liabilities. So, to clarify your business type, you might be thinking: Can you open an LLC without a social security number?
Definitely, you will get your answer before jumping to a conclusion. But before that, let’s briefly discuss the LLC. One of the best things about an LLC is that it protects its members from personal responsibility.
Creating an LLC is different in each state. Once the LLC is formed, it has to meet certain legal and tax requirements, like getting a tax ID number and sending the state a yearly report.
How Do You Apply for an EIN?
When you decide to get an EIN, you may also be curious to know how to get an EIN number for different business entities as well as a trust, organization, estate, etc. The good news is that we are going to explain to you the best way to get the EIN.
In fact, you can apply for your EIN by going online to the IRS website. To apply for an EIN, applicants must fill out Form SS-04 for their EIN number.
People who do not live in the United States but want to do business there can apply by phone, fax, mail, or the Internet. The application must have the following details: the name and personal taxpayer identification number of the company’s principal officer, partner, trustee, owner, or any other title.
Some of the information that will need to be written on the form is:
- Type of business entity.
- The reasons for applying (new business, change of organization, IRS withholding requirement compliance).
- Starting of the acquisition date.
- The principal industry of business.
- You must have a U.S. or U.S. located-based business.
- You must be a “responsible party,” which means you own or control the entity applying or have the most authority over it.
As soon as the online information is verified, an EIN is issued.
Applying for jobs online and submitting numerous forms and supporting documents can be a stressful and even difficult task. It is noted that you can not get much time for these procedures, which is why you must complete the application in one session.
Are you feeling confused? So, how do you get an EIN easily? Don’t worry.
You know, many business consultant agents will do this service for you. In this case, Business Globalizer can help you. You will just give us your proper information and the documents you need to apply, and we will take care of the rest. Also, we provide an EIN number without any SSN. Isn’t it cool?
Benefits of an EIN
- Avoiding TAX Penalties
The IRS might reject your filing, and you might incur penalties for a late return if you don’t have your EIN by tax day. So, you should have an EIN number. - Identifying Theft Prevention
You may be surprised to learn that obtaining an EIN is an effective method of preventing identity theft. An EIN distinguishes your personal finances from those of your business. - Making Financial Difference for Freelancers
As an independent contractor or freelancer, losing one client can have a massive effect on your finances. So, you need to expose yourself as a real owner. In this case, when you try to hire a client, your EIN or SSN number clears your identity in front of them. - Establishing a Business Bank Account
Some banks will allow sole proprietors to open a business bank account without an EIN, but others will not. For example, Bank of America’s checking and savings accounts require sole proprietors and other types of businesses to provide proof of their EIN. Moreover, if you are a nonresident of the US, you must have an EIN number to open a business bank account. - Developing Commercial Credit
Establishing a business credit history requires an EIN. Your personal credit history and your business credit history are similar. Besides that, business credit evaluates your company’s history of bill payment and financial responsibility rather than your personal financial habits.
What Can Business Globalizer Do for You?
Are you facing delays in getting a business license, filing your tax return, or opening a business bank account? If your answer is yes, then you need to consider your weaknesses. As a business owner, you might need an EIN (Employer Identification Number) that can help you do these things quickly.
You can rely on a US business formation service provider to get an EIN. In this case, Business Globalizer can help you get an EIN number without an SSN. Over 500 businesses have placed their confidence in Business Globalizer as an EIN service provider.
Business Globalizer knows many institutions also provide you with this type of service. But the question is, can you really rely on them? Will they refund your money if they fail? So, don’t be puzzled.
Business Globalizer is a trustworthy service provider. They basically focused on helping non-residents and foreign entrepreneurs achieve their goals.
Business Globalizer will offer you a 100% refund of your payment charge if we fail to obtain your EIN number.
In this case, they want an average payment charge from you for this service compared with other competitors. They charge a reasonable price for getting an EIN without any hassle. First of all, Business Globalizer will fill out the details and submit an application. Then they will hand over the EIN once it is issued. And Business Globalizer has long-time experienced experts regarding this issue.
