Payment process platform Square announced earlier this week its new free tool available to small business owners all over the U.S., the EIN Assistant from Square Payroll. According to Square, the EIN Assistant simplifies and streamlines the process of filling out the dense, legalese-filled forms required to create a separate tax entity for a business.
“An EIN (Employer Identification Number) is effectively a Social Security number for a business. The IRS uses EINs to identify businesses for tax purposes and they are mandatory for certain business entities such as corporations, partnerships, and limited liability companies. About 20% of businesses will have employees and require an EIN to pay them and their payroll taxes, while hundreds of thousands of other sole proprietors will choose to incorporate with an EIN to professionalize their business and separate it from their personal identity.”
Square also noted that it created and launched the EIN Assistant in order to remove friction for businesses looking to take the next step in their growth. Square’s EIN Assistant guides business owners through each step of the EIN application, IRS form SS-4, through a simple questionnaire that features conversational, easy-to-understand language. The company added:
“Once complete, Square will also handle the IRS filing process, and the business will receive its EIN in 1-2 business days. As an added benefit for Square merchants, their EIN will be automatically associated with their Square profile when it’s approved.”