An EIN number is a nine-digit number that an entity needs to have in order to have an identification number used for tax purposes. Businesses such as corporations or partnerships require an EIN, which can easily be applied for online. If you already have an EIN number for your business, you may be wondering what instances may arise when another EIN is needed. One instance is with an Estate EIN. If you are made the administrator or executor of a deceased individual’s estate, you will need to file for a separate EIN.
Why is an EIN Needed?
With an estate, an EIN is required so that the executor can file the taxes correctly associated with the estate as well as paying any creditors or distributing the estate to the rightful heir or heirs.
A probate court will authorize the correct estate executor on behalf of the deceased with what is called Letters Testamentary. The executor then has legal authority as well as tax authority over the estate.
The executor must file income tax returns for the deceased individual. The filing will need to cover any years that were not filed for in the past before the death of the individual. Estate taxes will also need to be filed, thus a tax ID is needed.
To make the process simple, you can file for a federal estate tax ID online. The application can easily be found at IRS-EIN-Tax-ID.com. After filling out the paperwork, click submit and wait just a short time for the EIN to be provided. It usually takes an hour to arrive via email, but the EIN may take as long as 24 hours depending on when you filed.
Once you have the appropriate EIN for the estate, you will then be able to file taxes and execute the processes needed for the deceased.