HOW TO OBTAIN A TAX ID / EIN NUMBER FOR A TRUST
Trusts have become very important in recent times as a result of the needs to bequeath properties to beneficiaries. While it is very important to establish trusts, you have to understand the tax implications regarding trusts. This will help to plan and comply with statutory requirements regarding trust funds.Â
It all boils down to understand the following: what is a trust, what are the different types of trusts and how to obtain a Tax ID for a trust. A trust is simply a legal arrangement that ensures that properties are held for a named beneficiary. Basically, there are two types of trusts: revocable and irrevocable trusts.Â
Revocable trusts are those in which the grantor is alive, maintains control over the trust and the tax filing of the trust is done via the grantor’s tax identification number. In this seldom case, a separate Tax ID is not needed, however, revocable trusts cannot be annulled and need to have their own tax identification number anyway for tax purposes of the IRS.
If youâ€™ve been looking for how you can obtain a TIN/EINÂ for your trust fund, the following entails the steps required to obtain one:
Step 1: Gather required information for application
Before you begin your journey to obtain an IRS Tax ID Number for the trust, you have to take your time to get all the required information needed. The following are among some of the important details you need to complete the application process: the grantorâ€™s name, the grantorâ€™s social security name, the name of the trust, the type of trust, the founding date of the trust, trustee’s name, and the mailing address of the trust.
Step 2: Complete the SS-4 Tax ID / EIN Application.
You can either fill out the official IRS SS-4 Application Form Online or you may obtain a paper form version of the Trust Tax ID / EIN Number Application. If youâ€™re having trouble locating the office of any IRS office, you can contact them via telephone and they will show the nearest office by your residence.
Step 3: Fill and complete the SS-4 Form and submit it.
Once you have found the SS-4 Form online, follow the instructions provided to complete it in the right way. Some of the information that will be required includes the name of the trust, mailing address and the trusteeâ€™s name. When you are done providing all the required information, you can submit the form via mail, online, phone, or fax.
Step 4: Wait to receive your EIN
Just wait patiently for the information to be processed to for the EIN to be provided. Usually, you will obtain your trust tax id via email within the hour but you will also receive a letter in the mail from the IRS office with your official receipt of your new Tax ID / EIN number for your trust.
Apart from tax purposes, the Tax ID number / EIN enables you to open a bank account for a corporation or partnership, secure a line of credit, doing a Keogh Plan,Â and start hiring employees to handle all tax withdrawals and much more.