A partnership is an unincorporated business entity involving two or more people engaged in a trade or business. Members of a partnership contribute money, property, labor and skill, and in return, share in the profits or losses of the trade or business.
Unlike a corporation, a partnership does not pay annual income tax; instead, each partner must file income or loss on his or her respective tax return.
However, a partnership must file an annual information return, which reports items like income, losses, dedications, and so on. Partners are therefore not considered employees, and are liable for income tax, self-employment tax, and similar withholdings.
Partnerships, like corporations, require what is known as an Employer Identification Number (EIN), also called a Federal Tax ID number.
An EIN is issued by the Internal Revenue Service (IRS) to identify businesses entities, including sole proprietors, corporations, limited liability companies, and partnerships.
Your partnership EIN is a unique nine-digit number. With it, you and the other partners will be able to establish a bank account in the name of the business, apply for credit cards in the name of the business, and apply for business permits.
We’ve made it easier than ever to apply for a Federal Tax ID or EIN on behalf of your partnership. Our online forms are quick to read and easy to navigate, and we work hard to get your Tax ID number to you quickly and professionally.
If you’re operating as a partnership with two or more people, please apply for a federal Tax ID number today, so you and your business associates can start benefiting properly from your business entity.