When a person passes away and the process of handling their estate begins, the first thing those responsible for the estate should do is determine if the person's estate needs a separate tax identification number.The EIN is a federal tax identification number that identifies the estate to the IRS.You can get an EIN by phone, mail or fax.
Step 1: If you need to report estate income, apply for an EIN.
This is the most common reason to apply for an EIN.IRS Form 1041 is an income tax return for the estate if the decedent had income-generating assets such as savings accounts, stocks, bonds, mutual funds, or rental property.If the estate's assets generate more than $600 in annual gross income, this form must be completed.
Step 2: If the funds from the estate will be used to create a trust, you should apply for an additional EIN.
If the will establishes a legal relationship where one person holds property for the benefit of another person out of the estate's funds, you will need to apply for a separate EIN.The trust is a different legal entity from the estate and will need an EIN.
Step 3: If the estate will operate a business after the owner's death, apply for another EIN.
If funds from the estate will be used to operate a business, you need an additional EIN.Similar to any other business, this new business will need its own EIN.
Step 4: You should obtain and read the instructions.
The EIN that will be used to complete Form 1041, which governs the income tax return for the estate, is issued by the Internal Revenue Service.There are online instructions for this form.The requirements for this form are hard to understand, so be sure to read them thoroughly.
Step 5: You should get a copy of the IRS Form.
You will need a copy of the form once you have read the instructions.The form can be found on the IRS website in PDF format.Get a copy of the form and fill it out.
Step 6: Complete lines 1 through 6
This information is used to identify the estate.Line 1 contains the first name, middle initial, and last name of the person who died.Write "N/A" in Line 2.The name of the administrator, or any other fiduciary, should be entered in Line 3.The mailing address of the estate can be entered in lines 4a–b.This address will be used by the IRS to send correspondence.If the administrator has an address other than that of the estate, fill out Lines 5a–b.You can enter the county and state where the will is.
Step 7: "N/A" is written in lines 7a and 8a.
This information is only used by certain companies and does not apply to an estate's application for a tax identification number.
Step 8: The box is labeled "Estate" in Line 9a.
This shows that you are applying for an estate.You will need to enter the social-security number in the space provided.Line 9b is where you can write "N/A".This form is only used by corporations.
Step 9: There is a box for "Other" in Line 10.
The reason for applying for a tax identification number is established in this part of the form.You are asked to give a reason after checking this box."Estate Administration" can be entered in this space.
Step 10: Line 11 and line 12 are complete.
Dates that will be used in determining the estate's tax liability are related to this information.The last month of your accounting/tax year can be entered on Line 11 and Line 12.
Step 11: Line 13 through 15 is complete.
Any employees working for the estate are covered by this information.If the estate hired cooks, maids, gardeners, you would need to fill out the appropriate sections.If the estate doesn't have employees, write "N/A" on lines 14 and 15.
Step 12: Complete lines 16 through 18.
This information can be used to identify you filling out the form on behalf of an estate.Check the box for "Finance & Insurance" when you fill out the information."Estate Administration" can be entered in Line 17When applying for an employment identification number, make sure to check the box for "yes" and give the previous number in the space provided.Write "N/A" in the space provided if you check the box for no.
Step 13: The "Third Party Designee" section is required.
If you want to authorize the person named in this section to receive the employer identification number, you need to complete this portion of the form.Write in "N/A" if you need to.You should put your attorney's contact information here if you want them to be the person to receive the identification number.
Step 14: The form is provided with space to sign and date.
You should write your phone number and fax number in the spaces provided, as well as your name and title.
Step 15: If it's necessary, have your third party sign it.
If you have filled out the "Third Party Designee" section, you will want to make sure that you and that third party sign this form.
Step 16: A copy of the form is needed for your records.
This is an important legal document and you should make a copy that you can reference later.It contains a lot of sensitive information so be sure to keep it in a secure location.
Step 17: You can apply online for a convenience option.
The easiest way to apply for an EIN is on the IRS website.Click the button at the beginning if you want to apply online, then fill out the information in the form and receive your EIN.Your EIN will be issued immediately after your information is verified by the IRS.Your EIN confirmation notice should be saved and printed after you receive it.You can apply online on Mondays through Fridays.If you apply for the EIN online, you won't need to mail the form to the IRS.
Step 18: If you are an international taxpayer, you should apply by phone.
If you are an international taxpayer, you can only apply over the phone.The IRS representative will need this information to process your request if you have your form nearby.You will be given an EIN after your information is verified.Write it on the top of the form and sign it.You can reach the IRS on the phone between the hours of 6 a.m. and 11:00 pm Eastern Standard Time.You may be asked to mail a copy of the form after you receive the EIN.Within 24 hours of your phone conversation, mail it to the address provided.Make a copy for yourself first.
Step 19: If it suits you, fax it in.
You can apply for the EIN via fax.Make sure your form is complete and accurate and that you have a fax number so the IRS can send you a response.If you're outside the U.S., fax the form to us.
Step 20: If you aren't in a rush, apply by mail.
You can apply for the EIN by mail.It takes about 4 weeks for the IRS to process your request, which is considerably longer than the others.If you're outside of the U.S., you can use the "Attn: EIN International Operation" address.