What is a Federal Employer Identification Number?

A Federal Employer Identification Number (EIN) is a unique nine-digit number assigned to a business or non-profit entity by the Internal Revenue Service (IRS). This number is used to easily identify and track the business entity for tax filing purposes. It is also used by banks and other financial institutions to identify businesses during transactions.

When Do You Need an EIN?

You will need to obtain an EIN if you're starting a business, applying for a loan, or opening a bank account for your business entity. Some employers will also require an EIN for payroll purposes. The EIN must be obtained before any of these activities can take place.

How to Get an EIN

In the past, obtaining an EIN required you to complete a form and mail it to the IRS. However, the IRS now allows you to apply for an EIN online or by fax. The process is quick and easy and can be done in a matter of minutes.

To apply online, you will need to provide your business name, type of business entity, address, and contact information. You will also need to provide the Social Security Number (SSN) of the responsible party for the business entity. Once you submit the application, you will receive your EIN within minutes.

Why Do You Need an EIN?

An EIN is an important piece of identification for businesses and non-profits. It is used to track tax information, open bank accounts, and apply for business loans. It also serves as a way for employers to identify employees for payroll purposes.

What Happens When You Don't Have an EIN?

If you don't have an EIN, you may be unable to open a bank account or apply for a business loan. You may also be unable to hire employees or obtain certain types of business licenses. It is important to obtain an EIN as soon as possible after starting a business.

Conclusion

A Federal Employer Identification Number (EIN) is an important piece of identification for businesses and non-profits. It is used to easily identify and track the business entity for tax filing purposes, open bank accounts, and apply for business loans. It is important to obtain an EIN as soon as possible after starting a business.