Are you thinking about getting your employer identification number (EIN)? If so, you’re not alone. Many people choose to get their EIN for a variety of reasons.
Perhaps you’re starting a new business and need to apply for a business license. Or maybe you’re hiring employees for the first time and need to set up payroll.
Fortunately, getting an EIN is relatively easy and you can do it yourself. This article will walk you through the steps to get an EIN for your business.
First, let’s start with a quick overview of an EIN and why you might need one. Then we’ll dive into the details of the application process.
What is an EIN?
An Employer Identification Number (EIN) is a nine-digit number assigned by the IRS to businesses for tax-filing purposes. It’s technically a type of taxpayer identification number (TIN). There is no fee to apply for an EIN. It’s free from the IRS.
Different Scenarios that Require an EIN
There are a few different situations in which you might need to get an EIN:
- Starting a new business: If you are starting a new business, you will need to get an EIN to open a business bank account and apply for a business license, if applicable.
- Hiring employees: Businesses with employees will need to obtain an EIN to set up payroll.
- Changing the business structure: You will need to get a new EIN if you are changing your business structure (e.g., converting from a Corporation to an LLC.” ).
Benefits of an EIN
Benefits of having an EIN include but are not limited to:
- It helps you to open a bank account for your business
- It allows you to file taxes using the company’s EIN
- It’s better for applying for business licenses and permits (instead of using your social security number, for example)
What information do I need to provide on the application?
When you apply for an EIN, you will need to provide basic information about yourself and your business. This data includes your name, address, and contact information.
You will also have to provide:
- The reason for applying for an EIN
- The type of business entity (e.g., Sole Proprietorship, LLC, Partnership, Corporation)
- The number of employees you have
- Where your business is located
After you have provided this information, you will proceed to verify your identity by providing your SSN (Social Security Number) or ITIN (Individual Taxpayer Identification Number).
Note: If you are a non-US resident and don’t have an SSN or ITIN, don’t worry. You can still apply for an EIN from the IRS. You just can’t apply online. Instead, you’ll need to use Form SS-4 and send it in by mail or fax. Where it asks for SSN/ITIN, just enter “Foregin”.
Once you have completed the application, you must submit it to the IRS. You will receive your EIN instantly if you apply online.
How to Get an EIN
Now you know what an EIN is and when you might need one. Let us dive into how to apply for one. The process is quite simple, and you can do it entirely online. If you are not sure how to do it, you can hire an LLC filing company, such as Northwest Registered Agent, for help. They’ll form your LLC and get your EIN from the IRS.
Here is a step-by-step overview of how to get an EIN for your business:
1. Determine if you need an EIN:
As we mentioned earlier, most businesses will need to obtain an EIN. However, there are a few exceptions.
2. Gather the required information:
Before you begin the application process, you must gather basic information about your business. It includes your business name, address, and contact information. You will also need to know the type of business entity you have (e.g., LLC, Partnership, etc.)
3. Choose an application method:
There are three different ways to apply for an EIN—online, by fax, or by mail. The easiest and quickest way to apply is online via the IRS website. Use the online filing if you have an SSN or ITIN. If you don’t have an SSN or ITIN, then we recommend faxing your application to the IRS. If you don’t have a fax, then you can mail it in.
4. Complete the application:
Once you choose your application method, you must complete the application form. This form asks for basic information about your business, such as your name and address.
5. Apply:
After completing the application, you must submit it to the IRS. If you are applying online, you can submit the form immediately. If you are applying by fax or mail, you will need to wait a few weeks (or a couple months) for your EIN to be approved.
6. Wait for your EIN:
If you apply for your EIN online, it will be approved instantly. If you apply by fax or mail it can take several weeks (or months, if they are backed up) before your EIN is approved. And that’s it!
That is all there is to get an EIN for your business.
What else do I need to know about EINs?
Once you have an EIN, it is important to keep it in a safe place. You will need it any time you file taxes or open a bank account in your business’s name. You’ll also need it if you’re applying for a business credit card.
We recommend making a few copies of your EIN approval (called the EIN Confirmation Letter). You can also scan and save a copy on your computer as well. Getting an EIN is simple but critical for a business.
Conclusion
An EIN is a unique nine-digit number assigned by the IRS to businesses for tax filing purposes. It’s an important number and is also used to open a business bank account, get business licenses, and more.
Most businesses in the US are required to have an EIN. Obtaining an EIN is simple and can be done entirely online.
