Ready to get started with your Maryland business? You’ll probably need a tax ID number first. Tax ID numbers are assigned to businesses by the government, when they register for tax purposes (and other practical purposes). Whether you run a corporation, an LLC, a nonprofit, or just a sole proprietorship, you’ll probably need to have a tax ID number before you can operate legally. This article will teach you the basics about tax ID numbers, including the conditions under which you’ll need one, and how to apply so you can get your tax ID number (EIN) by using the online SS-4 application as quickly as possible.
Steps to Obtaining a Tax ID (EIN) Number in Maryland
- Gather Business Member Information
- The Fastest Way to Apply for a Maryland Tax ID: Online
- Other Ways to Apply for a Maryland Tax ID
- The Efficient Way to Get an EIN in Maryland
- Are EINs and Tax ID Numbers the Same?
- Maryland State Tax ID Number: What It Is and How to Get One
Tax ID numbers are given to businesses when they register with the government, but to do this, you’ll need to provide several pieces of information about yourself and the co-founders of your business. If you gather these pieces of information in advance, you should be able to complete the application much faster, sometimes in a matter of minutes.
You’ll need to have the full legal names and legal addresses of all your founding business members. You’ll also need to have their social security numbers (SSNs). This should be sufficient to get you through the application.
Most business owners are interested in getting their tax ID numbers as soon as possible, and understandably so; the sooner they start their business officially, the sooner they can start making money. There are many different application methods you can use to get your EIN number, but some of them are much faster and more convenient than others.
Traditional methods used to be the only ways to get a tax ID, but today, the best possible method is to apply online. The online application is simple and straightforward. You can access it with any digital, internet-connected device, which means you’ll have 24/7 access. You’ll also be able to finish the application faster, especially if you already have the details on your founding members gathered. Most people, at this stage, can finish the application in just 5 minutes.
When you’re done with the application, you’ll submit it with the click of a button. Here, you’ll experience the greatest advantage of the online application: the turnaround time. You should receive your tax ID via email less than an hour after submitting it.
The online application method is universally recommended; however, there are several traditional methods available as well. In these methods, you’ll answer the same questions about your business and its founding members; you’ll just use a different medium. For example, you can finish the questionnaire over the phone, or fill it out on paper. If you complete a paper application, you can submit it via traditional mail or fax.
The real problem with these methods is that you’ll be stuck waiting 4 to 6 weeks to receive your tax ID by mail when using them, instead of just an hour.
If you’re a Maryland business owner looking to
get an EIN number as quickly as possible, you’ll want to know the most efficient way to get that tax ID number in your hands. Efficient methods save you time by allowing you to finish the application quickly and receive your tax ID number quickly, and they’re also more convenient.
In both of these categories, the best possible application method is applying online. Because you can access the online application at any time, you can save time immediately, and because the form is intuitive, you can finish it in just a few minutes. As long as you’ve submitted all the information, you should receive your tax ID number over email in an hour or less.
Other methods, like applying with a paper application or answering questionnaire prompts over the phone, can take upwards of 6 weeks.
The terminology describing tax ID numbers can be confusing, especially for new and aspiring entrepreneurs. For example, you might wonder if a tax ID is the same thing as an EIN.
"Tax ID" usually refers to a federal tax ID number, which is another name for your employer identification number or EIN. This is a unique ID number, not unlike an SSN, assigned to your business by the federal government. It’s used for a wide variety of purposes; for example, you’re required to have one in any business with multiple members and in any business that hires employees. You’ll need one to apply for most financial products, like business bank accounts, lines of credit, and loans, and to apply for local business permits, licenses, and certifications.
Most Maryland businesses will require a federal tax ID number, but even if they don’t, it can be useful to have one when filling out paperwork. Note that this is different than a Maryland state tax ID number.
Despite the similarities in name, your Maryland state tax ID number is different from your federal tax ID number (EIN). This number is assigned at the state level, and is similar, but serves a few different purposes. You’ll need one if you’re selling taxable goods and services in Maryland, or if you’ll owe excise taxes on certain regulated goods, like tobacco or gasoline. You’ll also use this to register for Maryland
state-level employment taxes, so you’ll need one if you have any Maryland employees.
To get one, you’ll first need to have a federal tax ID number. If you don’t have one yet, make use of the online application so you can get yours in an hour or less. Once in hands, you can complete a questionnaire for your Maryland state tax ID number. Again, you’ll have a few different options, but the online application method is faster and more convenient. Expect your state tax ID in 4 to 6 weeks.