Sole proprietors without employees may not need one but can benefit from an EIN to protect personal information and enhance business credibility. The IRS requires most businesses to have a federal tax ID number. Businesses that file taxes as a corporation or partnership also need to get an EIN, even if they don’t have any employees. This includes corporations, partnerships, purpose of ein number limited liability companies that elect S corp or C corp taxation, and multiple-member LLCs taxed as partnerships. These entrepreneurs use their Social Security numbers to file income tax returns and pay quarterly estimated taxes. An employer identification number (EIN) is issued by the Internal Revenue Service (IRS) to identify a business for tax administration purposes.
What is an employer identification number (EIN) and does your business need one?
EIN numbers also assist employers who must furnish 1099 forms to independent contractors. No business in the United States can be issued a credit card without having obtained an Employer Identification Number (EIN). You may not plan to go under, but if you do, you’ll need an EIN to assure personal assets are protected from business losses. Understanding the meaning of the EIN number is fundamental for any entrepreneur.
Apply by Fax
When you apply for an EIN, we presume you’re legally formed and the clock starts running on this three-year period. Employer Identification Number (EIN) refers to a unique identifier assigned to a business by the Internal Revenue Service (IRS). The nine-digit numbers are commonly used by employers for the sole purpose of reporting taxes in the U.S. The number helps business entities open bank accounts and apply for credit.
Get EIN to Apply For Credit Card
- By fax or mail – You can apply by fax or mail as indicated above.
- The IRS requires certain businesses like corporations, partnerships, and limited liability companies (LLCs) to have an employer identification number.
- If you’re starting a nonprofit, the IRS recommends you legally form your nonprofit business organization with your state before you apply for an employer identification number (EIN).
- Get unlimited tax advice right on your screen from live experts as you do your taxes.
- The processing time for a mailed application is about four weeks.
- Additionally, for a fee, third parties like Bizee can help you file for an EIN as part of their business formation services.
- The immediate processing of forms ensures a streamlined application process.
This separation reduces the risk of identity theft, as the EIN is specifically meant for business-related activities. LegalZoom provides access to independent attorneys and self-service tools. LegalZoom is not a law firm and does not provide legal advice, except where authorized through its subsidiary law firm LZ Legal Services, LLC. Use of our products and services is governed by our Terms of Use and Privacy Policy.
- Most small businesses must have an employer identification number (EIN) before they can open a business bank account, set up payroll, or file business tax returns.
- It’s helpful to fill out the form before calling because the IRS employee will need that information.
- The number is used by the IRS to track their tax obligations and filings.
- EINs are used by employers, sole proprietors, corporations, partnerships, non-profit associations, trusts, estates of decedents, government agencies, certain individuals, and other business entities.
- Doing so on the IRS website only takes a few minutes, and you’ll get your EIN immediately.
- Here’s when you need an EIN as a sole proprietor or single-member LLC and what benefits having this business tax ID offers.
Filing the SS-4 form online comes with several advantages. Along with being free, it’s quicker and can be done anywhere, anytime. Once you submit the form, the information is processed immediately, and, if eligible, you’ll receive your EIN instantly. This speedy process can help streamline your business operations. However, non-employers are also required to obtain one if they operate as a corporation or partnership. You can use your social security number (SSN) instead of an EIN if you are signing up for business credit or a loan.
Reasons Why You Need an EIN Number, And How to Apply
Once the application is completed, the information is validated during the online session, and an EIN is issued immediately. Taxpayers who apply online can view, print, and save their EIN assignment notice at the end of the session. Authorized third party designees will receive the EIN; however, the EIN assignment notice will be mailed to the applicant. The https://www.bookstime.com/ online application isn’t available for entities with foreign addresses or for applications in which the responsible party is an entity with an EIN obtained through the Internet. The principal officer, general partner, grantor, owner, trustor, etc. must have a valid taxpayer identification number (SSN, EIN, or ITIN) in order to use the online application.
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