The Internal Revenue Services does not discriminate. There is no age requirement for Tax ID number applications. If you are not sure when to start filing taxes, age does not matter. Income is what counts. For this reason, there is no limit on who can get an EIN.
Why Is an EIN Important?
Employer Identification number act as a social security number for businesses. These nine-digit numbers help the IRS distinguish between different companies and organizations. They are mandatory in most instances, but small sole proprietorships with zero employees do not need one to meet legal requirements.
Restrictions on the Young Entrepreneur
While the IRS may not stop minors from filling out an EIN form, there are plenty of other considerations. Laws limiting access to specific markets such as the sale of alcohol and tobacco, or adult entertainment related products may not be appropriate. Young business owners may also have difficulty securing financing or credit without approval from supervising parents or guardians.
How an EIN can Help Youth in Business
An employer identification number adds legitimacy to a new venture, and it helps to separate your business activities from your personal life. Here are several uses you may not have considered:
If you are just starting out in life, a risky undertaking like opening a small business might be exciting, but you need to keep your personal and business lives separate from one another. Business related errors can damage your personal credit history limiting your options.
What You Use an EIN For
The IRS assigns EINs to businesses, but they are not only used for tax purposes. Although this is an important component and reason to have one, you also will find that any banking services also will request an identification number.
When you apply for a separate business bank account, credit cards or other loans, you will often need an EIN. Some financial institutions will allow you to use your social security number if you do not have nor need an EIN, but some will only accept an EIN. In addition to banking, certain business licenses and permits also require an EIN. Therefore, it is often a good idea to get one in the early stages of your business so that you are able to work with them.
Getting Help with Your EIN Application
There is no age restriction regarding who can apply for an EIN. However, you might find that you need assistance to ensure that you fill out the information correctly, and not just because of your age. Many first-time business owners get confused about the processes to take to properly open a business. Therefore, you might find that working with an experienced entrepreneur or a business service will help you to attain this number and set the right foundation for your business.
Using Your EIN
There are many places where you will need to use your EIN. Certain business entities must have an EIN, including those with employees, partnerships and corporations. Certain LLCs and sole proprietorships do not always have to have an EIN, but they are usually a good option to have. Even as a young entrepreneur, signing up for an EIN for your budding business venture is a beneficial activity so that you have the number for the above activities. Additionally, you will have the foundation of your business set so that as it grows, you can easily grow with it without having to take additional steps.
Obtaining an EIN
GovDocFiling can help you get started and ensure that your fist business establishes a clear identity for itself. Fill out our online IRS sole proprietor applications, and we’ll make sure your EIN becomes available to you as soon as possible. We can even help you reorganize as an LLC when you are ready.