Nearly everyone who owns a business needs a tax ID number for their business. This number is called an employer identification number (EIN), and it’s critical for a wide range of business functions including opening a business bank account, filing employee tax forms, and more.
To help you out, we’ve created a guide on how to apply for an EIN number. This post covers basic concepts related to EINs and outlines the process of how to obtain an EIN number.
Frequently Asked Questions
People who are launching a business for the first time have a lot of questions about EINs. We’ve collected some of the most common questions and included their answers in this section.
Is A Tax ID Number The Same as an EIN?
An employment identification number is a type of tax ID number. There are different tax ID numbers for different situations. For instance, most US citizens and permanent residents use their Social Security Number as their taxpayer identification Number. Similarly, business owners use the EIN as the tax ID for their business.
Are There Other Common Acronyms for EINs?
There are several different names for EINs. Sometimes, people call EINs Federal Employer Identification Numbers (FEIN). That is because the federal government issues these numbers. Your business may get a different number from your state for state withholding or sales tax accounts. Others refer to these numbers as business tax IDs or federal tax identification numbers (FTIN).
Do I Need a Tax ID Number?
If you’re a business owner, you need a tax ID number. The tax ID number or EIN serves as a unique identifier for your business. For banking purposes, this nine-digit number is more accurate than using your business’s name, and many banks require it for business loans and accounts. It is also required on all employee tax forms, corporate tax returns, partnership returns, and many other government forms.
How Do I Get an Employer Identification Number?
To apply for an EIN number, you can use Form SS-4. You can also hire a tax professional to help you, but the fees can be high. Alternatively, you can apply online. In most cases, an online EIN application is the easiest and fastest option.
Do I Need an EIN If I’m Self-Employed?
Self-employed people often need EINs but not always. If you hire an employee, you need an EIN. You also need an EIN if you hire an independent contractor subject to withholding. If you want to separate your business and personal finances, most banks require an EIN if you want to open an account or apply for a loan in your business’s name. Even if you don’t need an EIN now, you may want to apply for one so that it’s ready to go when you need it.
How Do I Look Up My EIN Number?
You can look up your business’s EIN by finding the confirmation letter you received when you requested the number. You can also look for the number on old tax or bank forms where you wrote down the number. It may be on tax notices or business licenses from the government, or you can pull a credit report for your business and see if it shows your EIN. If you cannot find your EIN on any of your business paperwork, you can call the government and request to receive the number.
Apply For A Tax ID (EIN) Number
Now that you understand the basics, you’re probably wondering how to get an EIN number. You can apply for an EIN number through the mail, fax, or online. If your company is based in a foreign country, you can complete the EIN application over the phone, but generally, you must call Monday through Friday during business hours.
Applying for this taxpayer identification number online is the fastest and easiest option. However, you still need to complete several steps.
7 Steps to Help You Apply for an EIN Number Online
To help you prepare, we’ve outlined a step-by-step application process.
- Provide contact details about your business. You need the legal name, the doing-business-as (DBA) name, and the address of your business.
- Note the responsible party. For instance, for sole proprietorships, the sole proprietor is the responsible party. For partnerships, it’s one of the partners. In all cases, the responsible party must be an individual. The responsible party cannot be a business entity.
- List the taxpayer ID of the responsible person. Depending on their unique status, this may be a Social Security Number (SSN), an Individual Tax Identification Number (ITIN), or an EIN.
- Note whether or not the business is a limited liability company (LLC). Sole proprietors, partnerships, and S-corps can also register as an LLC. The other business structures are for tax purposes, while an LLC is primarily for legal purposes. An LLC is a state registration, and you must note when you filed your LLC on the EIN application.
- Choose your type of business structure. You may select from sole prop, partnership, corporation, personal services corporation, church, church-controlled organization, or other non-profit organization. However, it’s not just businesses that use this number. You may also choose from estate, plan administrator, trust, military/National Guard, farmer’s cooperative, state/local government, federal government, or Indian tribal government, if applicable.
- Select the reason for applying. Most businesses use this number for multiple purposes. Just choose the option that’s the closest to your immediate need.
- Make estimates about your number of employees. You can also check a box if you want to pay employment taxes annually instead of quarterly, but you can only qualify to do this if you expect to pay less than $1,000 in payroll taxes throughout the year.
Get Your EIN Number Right Away
Now that you know how to get an EIN number, it’s time to gather your details and start applying. As soon as you receive the number, you can start using it. There is no delay.
When you complete the application process online, you can often get your tax ID number right away. In contrast, phone and fax applications can take several days, and mail applications can take weeks.
When you’re a business owner, time is money. Save time by applying for an EIN online. Then, you’re ready to apply for loans, open bank accounts, file tax forms, and handle everything else that requires this number.