How to Set up a Tax ID for your Estate
If you will be administering an estate, then you are going to need to obtain a tax identification number first. This is often referred to as TIN or employer identification number (EIN.) The TIN is just a nine-digit number, but it can be essential when you need to identify certain tax accounts. The number will be sent to you by the IRS after you finish the set-up and request process. Many people that you work with in regards to the estate will probably want to use your TIN, so if you don’t have one it’s imperative that you go about getting gone right away. For example, if you want to create a trust or continue to administer an estate you will need to have the TIN handy. You will also need it if you want to start a business, buy a business, or hire employees for a business that you created.
The first step in setting up a TIN is to get prepared before you even apply. You will want to decide who will actually apply, especially if your estate is divided among heirs. If you choose, you can have a third party apply online on behalf of you as the taxpayer. This means that you will have to still provide authorization for the application to take place, but it may save you time concerning all of the paperwork. You will merely need to sign the form at the bottom and your third party can take care of the rest. For example, if you have an attorney working with you to organize the estate, he or she may be able to take on this responsibility to lighten your load.
You can apply online, or by the phone. You can also apply by fax or through mail process. All of these methods will work, though the online method is often the most immediate. You may be able to obtain your TIN in minutes if you use this method. Those who choose to use the mail instead may have to wait up to two weeks before they receive their TIN, which can halt a lot of estate administrations. Once you have the number, you can use it immediately. The TIN will be documented in the IRS’ permanent records.
You will want to obtain a Form SS-4. This form is also called an Application for Employer Identification Number. In order to fill out the form, you have to know the legal name of the entity or individual that you are working for and that person’s trade name if it is different. You will also want to name the executor, administrator, and trustee that are affiliated with the estate. You will need to provide both mailing and street addresses, and will need to list the Social Security Number of the decedent who left you the state. You will want to list the exact day that you created or acquired the estate and will then need to write about whether or not the applying entity has ever sought an EIN. If you are nervous to fill out this very inclusive form, you may want an estate planning attorney to come alongside you and help you gather the information that you need.
If you need an EIN for an inherited business you will also have to include information about the company. These facts include how many employees work there, the employee tax liabilities, the first date that you will need to pay employees, and the principal activity of business that the company produces. You will also want to talk about the principal work or services provided at the company. After you have given a detailed sketch of the company, you will want to submit the form for review. If you are approved, then you will be able to cross this item off of your to-do list and continue administering your new estate. If you need help with this process then recruit a lawyer or an estate planner to help.
Posted on Oct 18, 2012 3:10pm PDT