The kind of trust you have will determine whether it needs its own EIN. The Internal Revenue Service (“IRS”) issues an EIN, commonly referred to as a federal tax ID number, to identify an entity for tax reporting reasons. Like a social security number, an EIN has certain uses.
Revocable Living Trust EIN
Your Revocable Living Trust does not require a separate trust tax return to be filed or have a separate tax identification number (TIN) or employer identification number (EIN) as long as you are still alive. Your personal Social Security number is preferred by the Internal Revenue Service (IRS).
All income derived from trust assets must be reported on your individual IRS Form 1040. Give your social security number to a bank or other financial institution if they ask for your revocable living trust’s EIN (employer identification number) or TIN. Your trust is revocable during your lifetime, and as the grantor, you are responsible for paying the taxes on the assets held by the trust. Individuals pay a lower tax rate than businesses do.
Applying For An EIN
If your trust needs an EIN, a request is made as quickly as feasible to the IRS. In order to provide the IRS with the necessary information, the application includes details from both the grantor and the trust. A trustee may apply online or by mailing or faxing IRS Form SS-4. The EIN is available in a couple of minutes after a trustee submits an online application. The application may take a few weeks to process if submitted by mail or fax.
What Would Happen After You Pass Away?
Your trust becomes irrevocable for tax purposes upon your death. It might divide into several trusts, each of which might be viewed as a distinct taxable entity for taxation reasons. These irrevocable trusts will each submit an application for their own TIN, which will be issued by the IRS and is distinct from the beneficiary’s social security number. If an irrevocable trust has annual gross revenue of more than Six Hundred Dollars ($600.00), the trust must submit a separate tax return.
Call us today at Hurban Law, LLC for further assistance.
