When you file taxes, the name on your tax return has to match your Social Security number (SSN) or employer identification number (EIN). The IRS checks this information to verify your identity. If you’re considering changing your name or the name of your business, you have to follow the correct procedure to ensure your registered name will match the name on your tax return. Read below to find out how you can properly submit a name change ahead of tax season.
IRS name changes for businesses
When you file your business taxes, the IRS uses your EIN and business name to identify your business. If you decide to change your business name, an authorized individual will need to submit a name change. An authorized individual is someone who has legal authority to act on behalf of the business. We will provide more details about this process below.
When a business should file an IRS name change
There are lots of reasons you might consider an IRS business name change. One reason for a name change is to rebrand your business to align your brand identity with new goals, new products and/or services, or new target audiences. Your name can play a key role in growing your business — and a bad name can limit growth. If your business name doesn’t stand out or stick in the minds of customers or is outdated, it may be time to change it.
Another reason a business may change names is due to legal issues. If you received a letter from another company demanding that you change your name, it may be a good time to file for an IRS business name change. If you do have to change your business name due to legal issues, make sure your new name isn’t already being used by another organization. You can search the database provided by the US Patent and Trademark Office. Consult an intellectual property attorney if you have any additional questions.
Other common reasons for business name changes are mergers or acquisitions, an attempt to improve market perception, or simply for personal reasons.
Do you have to notify the IRS if you change your business name?
Notifying the IRS is an essential step when you change your business name. The IRS matches your registered business name to the name on your tax return, so you may have trouble filing the return if the names don’t match. The IRS may not be able to process your tax return, or processing may be delayed. Failing to process your tax return in a timely manner may lead to legal and compliance issues.
When you send a written notification to the IRS for a business name change, make sure it’s signed by an authorized representative. For sole proprietorships, this would be the business owner or authorized representative. For a partnership, this would be a partner. For corporations, this would be a corporate officer. You have to mail your business name change request to the mailing address in which you would have to send your tax return.
If you’re filing as a corporation or a partnership, you can check the appropriate box on Form 1120, 1120-S, or 1065 to let the IRS know you’re changing your business name. If you report the name change on the tax return, you don’t have to worry about sending any further notifications. The tax returns with the relative boxes are as follows:
- Form 1120 (Page 1, Line E, Box 3)
- Form 1120-S (Page 1, Line H, Box 2)
- Form 1065 (Page 1, Line G, Box 3)
If you have already filed your tax return for your business, then you can also notify the IRS of a name change via mail.
Will you need to apply for a new EIN?
Generally, you do not need to apply for a new EIN when you change your business name. However, it may be required and is dependent upon the circumstances as well as the type of business.
As a sole proprietor, you don’t need to apply for a new EIN if you change the name of your business. As long as you notify the IRS, you can file your taxes with your new business name. However, if you incorporate or take in partners to operate as a partnership, you will be required to obtain a new EIN.
Corporations don’t typically have to apply for a new EIN after changing names unless the corporation changes its entity classification into a partnership or a sole proprietorship.
Partnerships also aren’t required to obtain a new EIN for name changes in most cases. However, you will need to apply for a new EIN if you incorporate or if one partner takes over and becomes a sole proprietorship
If you do need a new EIN for any of the above reasons, you can easily apply for one with the IRS online application. If eligible, you will immediately receive your new EIN.
SSA name change for individuals
When you file your personal taxes, the name on your tax return also must match the name the Social Security Administration (SSA) has on file for you. If you recently changed your name or are considering a name change, read below for what you need to know.
When you’ll need to file a SSA name change
As an individual, there are a few scenarios where you might need to change your name. While many name changes are due to a marriage or a divorce, other individuals change their name for personal reasons.
Regardless of the reason you are changing your name, you need to file a name change with the Social Security Administration. All the names on a tax return, including any dependents you may have, must match the Social Security Administration records. If there is a name mismatch, it can prevent you from electronically filing your return and can also delay the processing of your return.
In certain states, you can use my Social Security account to change your name online. If you are not a resident of one of the select states, you can start your application online. You also have the option to fill out the SS-5 application and go to your local SSA office to speak with a SSA representative directly. Whichever way you use to change your name with SSA, your new card will usually arrive within 14 days via mail.
Once you notify the SSA of your name change, there is no further action that you have to take with the IRS.
Will you need to apply for a new Social Security number (SSN)?
You don’t need to apply for a new Social Security number when you change your name, In fact, the Social Security Administration only allows you to change your social security number in very limited circumstances, such as identity theft or if you are in danger.
What if you need to change your address, too?
If you recently changed your address, you need to notify the IRS. The process varies depending on the time of year you make this change.
If you changed your address right before filing your tax return, simply use your new address on your tax return, and the IRS will update its records automatically.
You can also complete Form 8822 to change your address with the IRS. Alternatively, you can notify the IRS in writing to the mailing address specified on the IRS website. Make sure to include your:
- Full name
- Old and new addresses
- SSN, EIN, or taxpayer identification number (TIN)
- Signature
If you don’t want to notify the IRS via mail, you can call them to let them know you’re changing your address. In order to change your address by phone, your identity will need to be verified.
Does an IRS name change cost money?
It doesn’t cost you anything to notify the IRS of your name or address change. However, when you decide you want to change your business name or your name as an individual, you will likely incur court and filing fees assessed by your resident state.
No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.
