You have just started your business, and you may be wondering how to get an EIN. But what is it? Why do you need it? Does it cost money to get?
What is an EIN?
An EIN is your Employer Identification Number. This is your business’s Tax Identification Number (TIN) and will be the way that the IRS identifies your business. This number allows you to open a bank account for your business, pay your employees and file your business’s taxes. Essentially, this is your business’ Social Security Number.
Want to learn how to get an EIN?
Do I need to get an EIN?
Not every business will need an EIN, but most do. Here, is a list of some of the circumstances that would require you to get an EIN:
- Your business has employees
- The type of entity is a corporation or partnership
- If your business files either of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms
- If you have a Keogh plan
- Non-profit organizations
There are other situations in which your business would be required to get an EIN, and the IRS has listed those scenarios here.
How To Get An EIN?
If you have a lawyer helping you form your business, then chances are they will show you how to get an EIN. However, if you are forming your business on your own then you just visit the IRS website, and you can get it within seconds. Simply fill out the questionnaire, and the IRS will send you your confirmation letter with your EIN on it. Other options include, fax, mail, and over the phone. If you are an international applicant then you will need to submit your application through the phone and the person applying for the EIN must be authorized to answer each of the questions required for an EIN.
Additionally, getting an EIN is a free service that the IRS provides. Do not be fooled by offers that charge to solely get your EIN, this is most likely a scam. If an attorney is helping you then they can get the number for you, otherwise you can go on the IRS website yourself and get it.
Applying online means you get your EIN immediately, and get to reap EIN benefits as soon as possible. Applying through fax can take up to a week. If you are applying by mail then it could take at least 4 to 5 weeks.
Other Things to Know about an EIN
Once you have been an assigned an EIN that will be the identifier for your business as far as taxes go. Generally, you will NOT need a new EIN if either of the following happens, but note this is not a complete list, and the IRS provides a more complete list here:
- your business changes its name
- you change your business location
- you operate multiple businesses
On the other hand, here is a short list of when your entity will generally need a new EIN:
- Sole Proprietorships: subject of bankruptcy proceeding; incorporating; taking in partners and operating as a partnership; purchasing or inheriting a business that you operate as a sole proprietorship
- Partnerships: incorporating; turning into a sole proprietorship; ending the current partnership and starting a new one
- Corporations: receiving a new Charter from the Secretary of State; being a subsidiary of a corporation that uses the parent’s EIN; becoming a corporation’s subsidiary; changing to a partnership or sole proprietorship; new corporation after statutory merger
- LLCs: it will depend on what kind of LLC you have formed (single-member, multi-member, etc.) which you can find more about here
For further information on getting a new EIN, you can go here.
This article is provided for informational purposes only. If you have questions or need help getting your EIN, you should consult with your attorney.
