IRS Publication 583 — Starting a Business and Keeping Records

Getting a Taxpayer Identification Number (TIN) You must have a TIN so the IRS can process your returns. Two of the most common kinds of TINs are the social security number (SSN) and the employer identification number (EIN).

• An SSN is issued to individuals by the Social Security Administration (SSA) and is in the following format: 000–00–0000.

• An EIN is issued to individuals (sole proprietors), partnerships, corporations, and other entities by the IRS and is in the following format: 00–0000000. Providing your TIN to others. You must include your TIN (SSN or EIN) on all returns and other documents you send to the IRS. You must also provide your TIN to other persons who use your TIN on any returns or documents they send to the IRS. This includes returns or documents filed to report the following information.

1. Interest, dividends, royalties, etc., paid to you.

2. Any amount paid to you as a dependent care provider.

3. Certain other amounts paid to you that total $600 or more for the year.

If you do not furnish your TIN as required, you may be subject to penalties. See Penalties, later. Employer Identification Number (EIN) EINs are assigned to sole proprietors, LLCs, corporations, and partnerships for tax filing and reporting purposes. See Form SS-4 and its instructions for more information and to see which businesses must get an EIN.

Applying for an EIN. You may apply for an EIN:

• Online—Click on the Employer ID Numbers (EINs) link at IRS.gov/businesses/small. The EIN is issued immediately once the application information is validated.

• By mailing or faxing Form SS-4, Application for Employer Identification Number.

• International applicants may call 267-941-1099 (not a toll-free number).

When to apply. You should apply for an EIN early enough to receive the number by the time you must file a return or statement or make a tax deposit. If you apply by mail, file Form SS -4 at least 4 weeks before you need an EIN. If you apply by telephone or through the IRS website, you can get an EIN immediately. If you apply by fax, you can get an EIN within 4 business days.

If you do not receive your EIN by the time a return is due, file your return anyway. Write “Applied for” and the date you applied for the number in the space for the EIN. Do not use your social security number as a substitute for an EIN on your tax returns.

More than one EIN. You should have only one EIN for a business entity. If you have more than one EIN and are not sure which to use, contact the Internal Revenue Service Center where you file your return. Give the numbers you have, the name and address to which each was assigned, and the address of your main place of business. The IRS will tell you which number to use.

More information. For more information about EINs, see Pub. 1635.

Payee's Identification Number In the operation of a business, you will probably make certain payments you must report on information returns (discussed later under Information Returns). The forms used to report these payments must include the payee's identification number. Employee. If you have employees, you must get an SSN from each of them. Record the name and SSN of each employee exactly as they are shown on the employee's social security card. If the employee's name is not correct as shown on the card, the employee should request a new card from the SSA. This may occur, for example, if the employee's name has changed due to marriage or divorce. If your employee does not have an SSN, he or she should file Form SS -5, Application for a Social Security Card, with the SSA. This form is available at SSA offices or by calling 800 -772-1213. It is also available from the SSA website at SSA.gov.

Other payee. If you make payments to someone who is not your employee and you must report the payments on an information return, get that person's SSN. If you make reportable payments to an organization, such as a corporation or partnership, you must get its EIN. T o get the payee's SSN or EIN, use Form W-9, Request for Taxpayer Identification Number and Certification. For more information, see IRS.gov/FormW9.

If the payee does not provide you with an identification number, you may have to withhold part of the payments as backup withholding. For information on backup withholding, see the Instructions for the Requester of Form W -9 and the General Instructions for Certain Information Returns.

Designating a Tax Year You must figure your taxable income and file an income tax return based on an annual accounting period called a tax year. A tax year is usually 12 consecutive months. There are two kinds of tax years.

1. Calendar tax year. A calendar tax year is 12 consecutive months beginning January 1 and ending December 31. CAUTION ! 4 Publication 583 (12-2024)