Many times, people only associate a Federal tax id number with starting a business, and for the most part, they are right. You need this number, so you can pay taxes for your business and employees and make other major business transactions. However, there are other groups of people who may need a tax id number from the IRS. The question is, are you one of those people, and how do you find out if you are? This is a great place to start.
For Your Business
You need an EIN number if you are starting a business and do not want to be personally liable for any losses that may occur with your business. You also need this number, so you can be sure to pay the IRS their portion of your earned income for that business.
For the Estate
You need an Estate tax ID number if you are the executor of an estate and you will be doing business under that estate. If you are going to continue to manage the estate and take financial responsibility for the estate, such as paying employees and managing assets, then, you will need an estate EIN. If your intention is to selloff all of the assets, then, you will need an estate tax ID so you can pay the necessary taxes on that income.
For a Trust
A trust is when one person creates a place to hold assets for someone else that they can have access to upon the meeting of any set forth criteria. There are several types of trust out there from conservatorship to settlement fund to escrow. You will need an IRS-EIN-Tax-ID for the various trust.
If you are unsure if you need a federal tax ID number, contact a professional who can make sure you are submitting the correct documentation for exactly what you need.
