Why Would I Need To Get An EIN For An Estate?
Applying for a federal Tax ID number is not just for corporations. Every entity that has financial dealings needs an EIN number. Just because EIN stands for Employer Identification Number, that does not mean that EINs are just for businesses with employees. Any type of entity that has official financial dealings must have an EIN number. Self-employed people need an EIN, and so do non-profit organizations. There is even such a thing as a Church Tax ID number. Estates are just one type of entity that must have an EIN and file taxes.
Why Does an Estate Need an EIN?
An estate is the wealth of a deceased person. Of course, living people are in charge of keeping track of that wealth. The wealth is identified separately (by an EIN) from any of the people who handle it. The money in the estate still gets dealt with, and the people who deal with it have to keep track of it legally. Therefore, the estate needs an EIN to identify it.
EINs are for any entity that has any type of financial dealings. Just what kind of financial dealings does an estate have? Its financial business falls into two categories. First, there is the transfer of money from the estate to the designated heirs of the deceased person. Second, there is income generated by the estate’s investments, often in the form of interest.
How to Get an EIN for an Estate
The process of getting an EIN for an estate is the same as getting an EIN for any other entity. Just fill out an application form for an EIN. If you fill out the application online, you will get the EIN within an hour.
Applying for an EIN is the simplest part of managing an estate.