Reasons to Create an EIN for Your Short-Term Corporate Rentals

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Published Date: 2023-05-31

As someone who offers short-term corporate housing, have you considered whether to apply for an EIN? Maybe you’ve heard the term in the past but are unsure whether it’s something you need to do as someone renting out furnished homes.

At CHBO, we recommend everyone who offers furnished housing moves forward to get an EIN (employer identification number). Below, we’ll talk about what this number is, why you might want one, and how you can get one before you move forward with your rental business.

What Is an EIN?

An employer identification number is composed of nine digits and tied to organizations and businesses for tax filing purposes with the IRS. The number is used to securely identify a business, whether it’s renting houses or baking bread.

EINs can be used when filing business taxes, obtaining loans, and opening bank accounts. Your EIN is also required to be used on forms related to tax information returns, employee wages, and similar things.

Understanding the importance of correctly filing taxes, bringing on contractors, and hiring workers is essential and ties into your EIN. The good news is that you can get one easily online. The entire process takes only a few moments.

Benefits of an EIN

There are a variety of benefits associated with having an EIN as a business. A few of the most important include:

• Better credit rating – Having an EIN helps establish a business credit rating for easier access to loans and credit.
• Tax filing – EINs are required to file federal and state taxes each year for some business configurations.
• Separate identity – An EIN makes it easier to separate a business from the owner, especially in terms of taxes.
• Open bank accounts – When visiting a bank to open a business account, an EIN is often expected.
• Deductible expenses – Businesses with an EIN can enjoy certain tax deductions, such as equipment purchase costs and employee salaries.

Signing Up for an EIN

The process to get an EIN is easy. Head to the IRS website and click on Apply for an Employer ID Number. Add all the requested information and you’ll be asked to verify your information using a government ID. From there, all you need to do is apply. Within minutes, you’ll receive the number and can use it in the future.

Whether you apply for an EIN the moment you decide to offer corporate rentals or later on, it’s a process that is well worth it. Consider the benefits and decide whether it’s the right step for you to take.