In the United States, the employer identification number or EIN is the corporate version of an individual’s social security number. Like for instance in Colorado, when you obtain a tax ID in Colorado, you get the number to use for payment of employee withholding taxes. The number is necessary for anyone setting or operating a small or big business.
The IRS will assign the nine-digit tax ID number and is given to government agencies, business entities, trusts and estates, non-profit organizations, partnerships, sole proprietors and employers. When you obtain a tax ID in Colorado, it will be used by the taxpayers to file various tax returns for their own businesses. Those individuals who are classified as employers can choose to use their social security number or EIN when it comes to reporting the taxes withheld for their employees. Contrary to the belief, credit issuers and credit bureaus can distinguish between a SSN and EIN numbers.
IRS developed the system to generate employer identification numbers in 1974 as a taxpayer’s identification for all the paperwork that show their payment for their employment taxes. The relevant provision was conceptualized in the 1954 Tax Code Revision, which was broadened in 1961. There is a difference in the number appearing between the EIN and the SSN. Thus the numbers can easily be distinguished by decoders and they know how the company has been registered.
All businesses, especially those operating in Colorado, will need to obtain a tax ID in Colorado to pay for their employees withholding taxes as well as their business tax returns. This is also a way to determine whether the business is an LLC, partnership, non-profit, corporation or S corporation. If the business has no EIN, he may be classified as a single proprietorship and will need to use a social security number for all his relevant tax documents.
How you can obtain a tax ID in Colorado will need you to access the IRS website and download the form SS-4. You need to accomplish it with all relevant details about you and your business. Send it back to them by fax or email for faster results and then you get your EIN number instantly. For as long as your business operates, this will be your permanent number.