Do you have to renew EIN numbers yearly?
Your tax ID number is a unique 9-digit code the IRS uses to track your company. This code is permanent. After assigned, The IRS does not require Tax ID renewal except in special circumstances. You must file income taxes for your company every year using the assigned EIN. If you operate multiple businesses, in most situations you will need a unique EIN per business. If one operates under a sole proprietor or partnership, they can use the same EIN with various DBAs.
Things You Can Do With an EIN
The IRS issues employer identification numbers to sole proprietorships, partnerships, corporations, and LLCs. Except in rare instances, and EIN is essential and mandatory for your company.
You gain the following benefits:
- You may hire employees
- File income taxes for your business
- Seek legal help such as filing bankruptcy in court
- Open bank accounts for your business
- Establish business credit
- Separate business and personal related financial activity
If you are a sole proprietor of a company with no additional employees, there is no legal requirement to have an EIN. It’s still a good idea to register a unique identifier to distinguish between your personal and work activity.
It Doesn’t Make Sense to Constantly Change Your EIN
Regular changes to EINs would cause havoc throughout the business and financial world. Companies would have to constantly reestablish their identities with banking and credit institutions. The IRS would also have to track changes in multiple numbers complicating the income tax collection process.
Instances When You Do Need a New EIN
There are times when a new identifier is required. If a company has a change in ownership or structure, it becomes a new legal entity. The IRS requires a firm to obtain a new EIN to distinguish historical activity between the two phases of the business’s life.
For Help, Contact GovDocFiling
Sometimes the process of filing a new EIN gets complicated. Conflicts between previous owners make it difficult to distinguish between legal entities. GovDocFiling can help. File out our federal EIN application form to get started. If you are ready to change over your business structure at the same time, use our LLC online filing service.