Taxation & Estate Planning

EIN PDQ FAQ

By Joel A. Schoenmeyer

I was hoping to have a new podcast up today, but technical difficulties -- my microphone isn't working -- have prevented that. I'll try to get the problem fixed, but thought I'd address the "taxes" part of my Death & Taxes mandate by discussing EINs.

What does EIN stand for?

Employer Identification Number.

Why might I need an EIN in the estate or trust context?

Because the estate or trust you are handling is a tax-paying entity.

What does the EIN do?

It's like a social security number for entities. In the estate or trust context, you can use an EIN to open a checking account. It's also the number you would use to file income tax returns for (to take a couple of examples) the John Smith Trust or the Estate of John Smith.

Hold on a second. Estates and trusts have to file income tax returns?

In some cases (where they earn a certain amount of income). Think of it this way: if income is being earned, the IRS wants it attributed to someone (or some entity). If John Smith dies on April 15, 2007, what happens to the income earned on John Smith's property AFTER that date?

I have a living trust. Do I need an EIN?

Not so long as you are still acting as the trustee of your own living trust.

Where do I get an EIN?

The easiest place to get one is online, here.

What information will I need to get the EIN online?

What a great question, one that the IRS should address on its site. If you are getting an EIN for an estate or trust that you are handling, you should have the decedent's information (SSN, full name and address). You'll also need to give your SSN, full name and address.

Can my attorney or accountant get the EIN for me?

Yes, but you'll have to give him or her authorization to do so by filling out an SS-4 form.

Full post as published by Death and Taxes Blog on May 18, 2008 (boomark / email).