Founder Advice

IRS Form SS-4: Its purpose and use

November 12, 2023
Minh Mai

Starting a business often means navigating a sea of paperwork. And out of all those documents, one of the most important is IRS Form SS-4: Application for Employer Identification Number.

An Employer Identification Number (EIN) is like a Social Security Number for your business. It’s essential for tasks like opening bank accounts, managing employee payroll, and even filing your business taxes.

So let’s take a look at how to accurately complete Form SS-4, and how Stable can help you manage all those important documents for your new business.

What is an IRS Form SS-4?

IRS Form SS-4 is the application form for an Employer Identification Number (EIN). An EIN, often called a business tax ID, is a unique identifier issued by the Internal Revenue Service (IRS) to businesses operating in the United States. 

In short, an EIN separates your business entity from others. You’ll need it for all kinds of financial, legal, and regulatory purposes, from payroll to permits. 

What is the purpose of an SS-4 Form?

Now that we've established what IRS Form SS-4 is, let's dive deeper into why you need to file this application and get an EIN for your business.

  • Banking: First, you’ll need an EIN to open a business bank account. This number tells banks that you're officially recognized by the IRS.
  • Hiring employees: If you're planning to hire employees, an EIN is essential for tax reporting, payroll, and other employee-related processes.
  • Tax filings: You’ll also need an EIN to file state and federal tax returns for your business.
  • Licenses and permits: Many state and local agencies won’t issue licenses or permits, including industry-specific licenses, without an EIN.
  • Establishing credit: Your EIN is tied to your business’s credit rating, so you’ll need one to establish creditworthiness.

With the right tools, like Stable's virtual mailbox and mail management services, handling IRS Form SS-4 and other business documents is a breeze.

Who needs to file Form SS-4?

IRS Form SS-4 isn't just for big enterprises — businesses of all sizes need an EIN for regular operations, including:

Sole Proprietorships

For sole proprietorships, where the business and owner are essentially the same entity, you might wonder why there's a need for an EIN. While sole proprietors can use their personal Social Security Number for tax purposes, an EIN offers some advantages. 

First, it provides a layer of identity protection, keeping the owner’s personal data private. Second, it allows the owner to open a business bank account, separating personal finances from business operations. Finally, if the sole proprietorship plans to hire employees, an EIN is mandatory. 

Corporations

Corporations are separate legal entities from their owners, so they need their own unique identifiers. With an EIN, corporations can file corporate tax returns, open corporate bank accounts, and hire employees. An EIN ensures that the corporation's operations, profits, and losses are completely separate from its shareholders. 

LLCs (Limited Liability Companies)

Nearly all LLCs will need an EIN, even if they’re single-member LLCs — especially if they plan to hire employees or opt to be taxed as a corporation rather than a disregarded entity. LLCs can use their EIN for contracts, licenses, tax purposes, and other official business activities.

Step-by-step guide for completing Form SS-4

Filling out IRS Form SS-4 can feel daunting, but we’ll break the process down step-by-step. Here’s exactly how to fill out Form SS-4.

1. Legal name of entity:

  • For sole proprietorships: Enter your full legal name.
  • For other entities: Use your business’s official legal name, as registered with your state.

2. Trade name / doing business as (DBA):

  • If your business operates under a different name than its official registered name, list that name here.

3. Executor, administrator, trustee, “care of” name:

  • This is only relevant for trusts or estates. Otherwise, you can skip it.

4. Mailing address:

  • Make sure this address is accurate and up-to-date. If you need a physical mailing address for your business, you can get a virtual mailbox from Stable.

5. Street address (if different):

  • If your business’s physical address is different from its mailing address, enter it here.

6. County and state where the principal business is located:

  • Enter the U.S. state and county where your business is physically located. Stable’s virtual mailbox services can help you get a permanent business address.

7. Name of responsible party:

  • This should be an individual with direct control over the entity or the authority to manage its assets.

8. SSN, ITIN, or EIN:

  • The Social Security Number, Individual Tax ID Number, or Employer Identification Number of the responsible party listed in the previous step.

9. Type of entity:

  • Check the box that matches your business type.

10. Reason for applying:

  • Check the box that indicates why you're requesting an EIN. 

11. Date business started or acquired:

  • Enter the month, day, and year your business formed.

12. Closing month of accounting year:

  • Specify the month your accounting year ends. For most businesses, their fiscal year follows the calendar year, so this would be December.

13. Highest number of employees expected in the next 12 months:

  • An estimate works here — just ensure you account for all categories of employees.

14. First date wages or annuities were paid:

  • Indicate when your business first started payroll. If you don’t have employees, you can skip this line.

15. Principal activity of the business:

  • Briefly describe the main product or service your business provides.

16. Has the applicant entity previously applied for an EIN?

  • Answer "Yes" or "No.” If you answer yes, you’ll need to provide your previous EIN.

17. Third Party Designee:

  • If you have a registered agent, you can add their information here. If you have a business address through Stable, you can also get a registered agent.

Finally, after completing the form, make you sign and date at the bottom. Be sure to double-check and make sure you filled it out accurately and completely to prevent any delays or rejection.

Uses of an EIN after receiving it

Once you’ve submitted IRS Form SS-4 and received your EIN, you might be wondering, "What next?" This unique nine-digit number isn't just a formality — it's a key that unlocks various doors in the business world. 

From establishing a solid financial foundation for your business to ensuring you're in compliance with federal laws, an EIN is an indispensable asset. Let’s dive into some of the primary uses of an EIN once you have it in hand.

Opening a business bank account

An EIN is often mandatory for opening a business bank account. Banks and financial institutions need to be sure that they are dealing with a legitimate business entity, and your EIN proves your business is legally recognized. 

A business bank account that’s separate from your personal account is essential for clear financial record-keeping, protecting personal assets, and presenting a professional image to clients and vendors. Plus, with your EIN, you can also apply for business loans and credit cards, giving you access to additional funding.

Hiring employees and payroll setup

If you're looking to expand your team, an EIN is a must. Even if you hire just one employee, you'll need an EIN to report and pay the federal taxes withheld from your employees' paychecks. 

Additionally, having an EIN allows businesses to enroll in the Electronic Federal Tax Payment System (EFTPS), making it easier to deposit federal taxes electronically. 

Tax reporting and other federal documentation

An EIN is not just for hiring employees — you’ll also need it to file your business’s federal tax returns. Whether you're a sole proprietor, partnership, or a large corporation, your EIN ensures that the IRS recognizes and accurately processes your tax payments. 

Beyond tax reporting, an EIN is also required for certain federal licenses and permits, depending on your business type and operations.

With your EIN playing such a central role in so many business operations, it's important to manage Form SS-4 and other vital business documents securely and efficiently. Platforms like Stable offer a convenient digital solution, ensuring you're always updated and organized when it comes to business correspondence.

Try Stable’s virtual mailbox to easily file IRS Form SS-4

By following these instructions, you can confidently submit IRS Form SS-4 and get a unique EIN for your business. From business bank accounts to employee payroll to federal tax purposes, an EIN is a vital tool for your business.

You can use Stable as your virtual address and to keep all of your important business documents secure, organized, and accessible. With Stable's virtual address and mailbox, managing, filing, and referencing all your business-related mail is simple. 

Ready to take the next step in seamless mail management? Start your journey with Stable today and position your business for success.

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