Obtaining an EIN online is fast and easy. You simply need to find a service that can help you process the application, and then, you need to provide them with information about your company and why you need this number. To help you obtain an EIN online, this guide outlines the details you need to understand before you apply.
Purpose of an EIN
If you’ve never applied for an EIN, you may be wondering what the purpose of this number is. An EIN identifies your business to the government. Short for Employer Identification Number, it serves as a unique identifier of your business, and it’s much more effective than simply using the name of your business. This is very similar to how people use Social Security Numbers.
All kinds of people have the same names, but everyone has a unique Social Security Number. If someone needs to file a tax return or apply for a bank loan, they note their name on the application, but to ensure their records don’t get lost in the shuffle, they also use their Social Security Number. An EIN plays this same role but for businesses.
Reasons to Apply for an EIN
Although an EIN is called an employer identification number, it’s not just for employers. Businesses and other entities use this number to identify themselves for all kinds of different purposes, and by extension, there are many different reasons you may need to apply for an EIN.
In particular, you may need an EIN because you are starting a new business. In other cases, you may have been in business for a while, but now, you need an EIN because you’re getting ready to hire your first employee. As an employer, you need to put your EIN on your employees’ pay stubs and tax forms. You also need it when you submit tax withholding payments.
Typically, if you work with 1099 contractors, you don’t necessarily need an EIN, but if they don’t provide you with a W9 or if they’re foreign residents, you may need to withhold money from their payments. To do so, you will need an EIN for backup withholding purposes.
Your business may also need to obtain an EIN so that it can open a bank account, apply for loans, or take care of other banking matters. If you’ve purchased an existing business, you may need to apply for a new EIN so that you don’t use the EIN associated with the old owner’s details.
Outside of business purposes, you may need an EIN if you create a trust or a pension plan. Think about why you need the EIN before you start the online application. To get an EIN online, you will need to explain why you want one.
How to Obtain an EIN Online
EINs, like Social Security Numbers, are issued by the government. Typically, people obtain Social Security Numbers when they are born or when they immigrate to the country. Hospital staff and immigration lawyers guide people through this process and help them obtain the number.
Similarly, there are people and entities that can help you obtain an EIN. Business lawyers and accountants can help you obtain an EIN. But, you don’t have to travel to a professional’s office. Instead, you can find a service that will help you complete the process completely online.
Information Needed to Obtain an EIN
So that the government can provide your business with an EIN, you need to provide a few details about your business. This information helps the government and other entities to connect your business with the EIN. Submitting an accurate application is critical if you want to obtain an EIN online.
To get started, you need basic details about your business. That includes the following:
- The legal name of the business or individual requesting the EIN — If your business is a corporation, you will provide that name. Sole proprietors should use the legal name of the owner.
- Trade name — If your business is a sole proprietorship, its legal name is the same as yours, but you may have a “doing business as” (DBA) name. That is your trade name.
- Contact info — You also need the mailing address and phone number of your business.
- Name of the responsible party — For sole proprietorships, you use your own name, but for partnerships or corporations, you may need to use a shareholder of the company, a board member, or a financial professional.
- LLC details — You also need to note if your business is a limited liability company (LLC), and if so, you need to share the number of members.
- Type of entity — You also need to note which type of entity your business is. Most businesses will be sole proprietorships, partnerships, or corporations, but you can also apply for an EIN for a personal service corporation, a church, or a non-profit organization. You may even get these numbers for estate, trusts, farmer’s cooperatives, and REMICs. Even federal, state, local, and tribal governments can apply for an EIN online.
- Principal business activity — To obtain an EIN online, you need to provide details about your principal business activity. This may be construction, real estate, rental & leasing, finance & insurance, health care & social assistance, accommodation & food service, wholesale services, retail, or others.
When submitting an online EIN application, you can also share written details about what your business does. In particular, you may want to explain the merchandise you sell, services you provide, or products produced.
An EIN is a critical element of running a business. Without this number, you won’t be able to pay employees, handle banking essentials, or manage multiple other aspects of your business. To ensure you can run your business effectively, you need to obtain this number as soon as possible. If desired, you can apply for an EIN through the mail or over the phone, or as explained above, you can work with a financial professional in person. To expedite the process, however, you should find a service that can help you apply for an EIN online.Apply For a TIN