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Does a Foreign Entity Need a U.S. Identification Number?
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Article Highlights:Foreign Entities Conducting Business in the U.S.U.S. AddressApplying for an EINBy TelephoneEIN OnlineBy Fax or MailUpdating EIN InformationIt is mandatory for foreign entities that are conducting business in the United States to have an Employer Identification Number (EIN). It is needed for tax and payroll reporting and U.S. banks will require one to establish accounts. To qualify for an EIN, a foreign entity must have a business or trade in the United States or be planning to start one soon. An EIN is also needed for filing Form 5472 -Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.In addition, foreign entities that are not individuals (i.e., foreign corporations, etc.) are required to have an EIN to claim an exemption from withholding because of a tax treaty provision (claimed on Form W-8BEN).Foreign entities don’t need a physical address in the U.S. to get an EIN, but having one makes it much easier to get a bank account in the U.S. An EIN can be obtained in several ways using IRS Form SS-4, including online, by mail, by FAX, and by telephone. Here is an overview of the options:By Telephone – This option is available to international applicants only. If the applicant has no legal residence, principal place of business, or principal office or agency in the U.S. or U.S. possessions, the applicant may call 267-941-1099 (not a toll-free number), 6:00 a.m. to 11:00 p.m. (Eastern time), Monday through Friday, to obtain an EIN.However, the person making the call must be authorized to receive the EIN and answer questions concerning Form SS-4. Complete the Third-Party Designee section only to authorize the named individual to receive the entity’s EIN and answer questions about the completion of Form SS-4. The designee’s authority terminates at the time the EIN is assigned and released to the designee.Note - Complete Form SS-4 before calling the IRS to make sure all the information needed is available at the time of the call. An IRS representative will use the information from Form SS-4 to establish the entity’s account and assign an EIN. The person making the call to the IRS should write the number given by the IRS assister on the upper right corner of the form and sign and date it. This copy should be kept by the applicant for their records.By EIN Online – The application can be submitted online. It would be wise for the individual submitting the application to manually complete the SS-4 in advance to ensure they have all the necessary information. The online application must be completed in a single visit; the information cannot be saved and completed later. In addition, a session will timeoutafter 15 minutes of inactivity, and the applicant will need to start over. The EIN is immediately available.The principal officer, general partner, or owner of the business must have a valid taxpayer identification number (SSN, EIN, or ITIN) in order to use the online application.Note also that if there is NO legal residence, principal place of business, or principal office or agency in the U.S. or U.S. possessions, the online application cannot be used to obtain an EIN.By Mail or FAX – Visit the IRS website for current addresses and FAX numbers. When faxing, the EIN will generally be available within 4 business days. By mail it will take approximately 4 weeks.
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Tax and Financial Insights
by NR CPAs & Business Advisors
2026 IRS Mileage Rates: Key Updates and Insights
The IRS has rolled out the inflation-adjusted mileage rates for 2026, offering taxpayers an efficient way to claim deductions for vehicle-related expenses incurred for business, charity, medical, or moving purposes. These adjustments reflect the continued economic shifts impacting car operation costs.
Effective January 1, 2026, the new standard mileage rates are established as follows:
- Business Travel: Increased to 72.5 cents per mile, inclusive of a 35-cent-per-mile depreciation allocation. This marks a rise from the 70 cents per mile rate set for 2025
- Medical/Moving Purposes: Reduced slightly to 20.5 cents per mile, down from 21 cents in the previous year, reflecting the variable cost considerations.
- Charitable Contributions: Consistent at 14 cents per mile, a fixed rate unchanged for over a quarter-century.
As is typical, the business mileage rate considers the integral fixed and variable costs of automobile operation. Meanwhile, the medical and moving rates remain contingent on variable expenses as determined by the IRS study.
It is critical to note that the One Big Beautiful Bill Act (OBBBA) held firm on disallowing moving expense deductions except for specific cases within the Armed Forces and intelligence community, marking a substantial shift since 2017.
When engaging in charitable work, taxpayers might opt for a direct expense deduction over the per-mile method, covering gas and oil costs. However, comprehensive upkeep and insurance costs are non-deductible expenses.
Business Vehicle Use Considerations: Taxpayers can alternatively compute vehicle expenses using actual costs, which might benefit from shifting depreciation rules, particularly through bonuses and first-year advantages. Keep in mind, however, reverting from actual cost calculations to standard rates in subsequent years is restricted, particularly per vehicle protocol and when exceeding four vehicles in concurrent use.
Additionally, parking, tolls, and property taxes attributable to business can be deducted independently of the general rate, an often-overlooked advantage by many business owners.
Tax Strategies for Employers and Employees: Reimbursements based on the standard mileage framework, providing the right documentation is in place, remain tax-free for employees. Meanwhile, the elimination and continued prohibition of unreimbursed employee deductions continue, with particular exceptions offered to qualified personnel across specific occupations.
Opportunities for Self-employed Individuals: Entrepreneurs remain eligible for deductions on business-related vehicle use via Schedule C, with potential to account for business-use interest on auto loans.
Heavy SUVs and Deduction Advantages: Heavier vehicles exceeding 6,000 pounds but under 14,000 pounds open opportunities for substantial tax deductions through Section 179 and bonus depreciation avenues. The lifecycle of such a vehicle bears implications on recapturing initially claimed deductions, urging cautious tax planning.
For professional guidance on optimizing your vehicle-related tax deductions and understanding their implications on tax strategies, contact our office in Coral Gables, Florida, where expert advice and strategic insights are just a call away.
Educator's Deduction Reform: Key Changes Under OBBBA
The One Big Beautiful Bill Act (OBBBA) introduces significant enhancements for educators' tax deductions starting in 2026, offering both strategic opportunities and planning considerations for educators who qualify. With the reinstated itemized deduction for qualified unreimbursed expenses, educators have a broader spectrum of financial relief. This is complemented by the retention of the $350 above-the-line deduction, allowing educators to maximize their tax benefits by selectively allocating expenses between these avenues.
Understanding the nuances of these changes is crucial for educators and financial advisors alike. The dual-option deduction strategy can potentially enhance tax efficiency, thereby aligning with broader financial planning goals.
At NR CPAs & Business Advisors, based in Coral Gables, Florida, our expertise in tax preparation and planning provides invaluable support to educators navigating these changes. Our comprehensive approach, combined with personalized advice from our experienced team, ensures compliance and optimization in line with the latest tax legislations.
Given these updates, it is imperative to engage with seasoned professionals to fully leverage your deduction strategies. Contact us today to streamline your tax planning under OBBBA's new guidelines and maximize your deductions for upcoming tax years.
