Definition:
An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the IRS to identify a business entity for tax purposes.
It’s like a Social Security Number (SSN) for your business, used to identify your business in various legal, tax, and financial settings.
It’s required for several important business functions, including filing taxes, opening a business bank account, and hiring employees.
Filing business tax returns.
Opening a business bank account.
Hiring employees and managing payroll.
Applying for business licenses or permits.
Establishing business credit.
Not all businesses need an EIN, but it’s often recommended even if it’s not mandatory. Use the questions below to determine if your business requires one.
You hire employees.
Your business operates as a partnership, corporation, or LLC with multiple members.
You file excise or employment taxes.
You withhold taxes for non-wage income paid to non-resident aliens.
Your business has a Keogh plan (a type of retirement plan).
You’re involved with certain organizations such as estates, trusts, or non-profits.
You’re a sole proprietor with no employees.
You don’t file excise or employment taxes.
You operate under your own SSN for tax purposes.
Even if it’s not required, obtaining an EIN offers several benefits:
Keeps your personal SSN private and reduces identity theft risk.
Makes opening a business bank account easier.
Helps establish credibility with clients and vendors.
The process is straightforward and can be done online through the IRS. Below is a step-by-step guide.
Legal name of your business.
Business structure (e.g., Sole Proprietorship, LLC, Corporation).
Business start date.
Principal officer’s SSN, ITIN, or EIN.
Physical and mailing addresses for your business.
*Not all businesses need an EIN, but it’s often recommended even if it’s not mandatory. Use the questions below to determine if your business requires one.
You hire employees.
Your business operates as a partnership, corporation, or LLC with multiple members.
You file excise or employment taxes.
You withhold taxes for non-wage income paid to non-resident aliens.
Your business has a Keogh plan (a type of retirement plan).
You’re involved with certain organizations such as estates, trusts, or non-profits.
You’re a sole proprietor with no employees.
You don’t file excise, employment taxes, or alcohol, tobacco, and firearms taxes.
You operate under your own SSN for tax purposes.
Even if it’s not required, obtaining an EIN offers several benefits:
Keeps your personal SSN private and reduces identity theft risk.
Makes opening a business bank account easier.
Helps establish credibility with clients and vendors.
Select the Type of Business Entity: Choose from Sole Proprietorship, LLC, Corporation, Partnership, or Nonprofit.
Provide Business Details: Enter your business name, address, and start date.
Identify the Responsible Party: Provide the SSN, ITIN, or EIN of the individual responsible for the business.
Answer Business Activity Questions: Indicate your primary business activity and any specific details.
Review and Submit: Double-check all the information before submitting the application.
Once you complete the online application, your EIN will be assigned immediately, and you can download the confirmation letter. You can complete it by mail but receiving your EIN will take longer.
No, obtaining an EIN from the IRS is completely free.
Yes, if you prefer not to apply online, you can complete Form SS-4 and submit it via mail or fax.
Mail: Processing takes about 4 weeks.
Fax: Processing takes about 4 business days.
No, EINs are permanent and cannot be changed. However, if your business undergoes significant changes (e.g., switching from Sole Proprietorship to Corporation), you may need to apply for a new EIN.
Contact the IRS Business & Specialty Tax Line at 800-829-4933 for assistance.
IRS EIN Application: Apply Online
Form SS-4 Instructions: Download Form SS-4
IRS Business Helpline: 800-829-4933
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