Every organization must have a tax ID called EIN which the IRS issues. We suggest you obtain EIN upon incorporation of your business.
This is where you’ll select how your corporation will be taxed. You can select any kind of taxation (for instance, Corporation can be taxed as LLC).
The owner and business are the same. From the viewpoint of the IRS, the company isn’t an entity that is taxable. Rather, every asset and liability of the business, as well as the revenue, belongs to the owner of the company.
Much like sole proprietorships, at least 2 owners and the company are one-and-the-same. Under federal law, a partnership is not a taxable entity. There is a corporate income tax to be paid rather than an individual partnership income tax. Revenue generated from the partnership is taxed to each partner at their own individual tax rates. For tax purposes, all the partnership’s revenue will be reported as “passed-through” or distributed to the partners, who will then be taxed on it via their own separate returns.
Limited liability company (LLC)
An individual legal entity made by a state filing. As per state laws, owners of LLCs are provided with liability protection that was once only offered to shareholders of a corporation. Today, for federal tax reasons, LLCs are given the same treatment as partnerships (unless they opt to receive the same treatment as a corporation, which many done). The taxation process for LLCs is“pass-through”, meaning that taxes on the income LLCs make are paid at a business level. Instead, income/loss is declared on each owner’s personal tax returns, and all taxes owing are paid on an individual level. While LLCs receive the same treatment as partnerships as far as federal taxes are concerned, that might not be the case for state tax reasons.
An individual legal entity made by a state filing. The C corporation, sometimes known as the “regular” corporation, must pay corporate income tax. Income generated by a C corporation is usually taxed at corporate income tax rates. Additionally, income earned by a C corporation must also endure what is known as “double taxation,” which involves the company’s income (split with the owners through dividends), which is taxable. Tax is initially paid by the corporation on its income before being taxed once more by owners on the dividends obtained. If the corporation provides the owner with a salary, it must also pay income tax (and FICA).
An individual legal entity made by a state filing. For tax reasons, the S corporation makes their own arrangements with the IRS so they can receive the same treatment a partnership or LLC receives for tax purposes. Their income endures taxation that is “passed-through”, as the company’s profit or loss is passed through the organization to the shareholders. Unlike with income generated by a C corporation, with pass-through taxation, income generated by the S corporation doesn’t need to endure double taxation.
To obtain your EIN number, we fill in every form using our EIN Assistance service. It takes approximately 4 to 5 days for customers with SSN. It takes up to 5 weeks for customers without one.
Online EIN (Tax ID)