An EIN, Employer Identification Number, is a federal business tax ID that works like a Social Security number for your business – many of your business financial matters will depend on it.
*An EIN can only be obtained online if you have a SSN. Otherwise, you’ll receive IRS Form SS4 and instructions on how to file it.
Essential for banking formalities. Most banks will ask for your EIN when applying for a business bank account.A must for hiring employees. You will need your EIN to hire employees and pay salaries.Important for grants and loans. You can apply for these after you have your EIN.In short: Every single business entity under your name should have a separate EIN, as required by the IRS, unless they are single-member LLCs. This means that even if you already have an EIN, you still need to get a new one.
This is because it’s used to identify a business entity – like a Social Security number.More in-depthAn EIN allows you to:
- Pay federal and state taxes
- Establish credit for your business
- Maintain your business’ official standing as a legal business entity
As per the Small Business Administration’s (SBA) recommendation, getting an EIN is essential for your business if you plan on doing any of the following:
- Open a business bank account
- Hire employees
- File tax returns for employment, excise, etc.