Does My Business Need an EIN?
If your business is a sole proprietorship with no employees and who doesn’t file any excise or pension plan tax returns, then you are not required to get an EIN. However, it’s usually advisable to get an EIN in order to open a business bank account, build business credit, and lower the risk of identity theft.
If your business is a single-member LLC with no employees or excise tax liability, then you are not required to get an EIN. However, it’s usually advisable to get an EIN in case you decide to hire employees later, and in order to maintain your corporate veil.
If your business is a partnership, or multi-member LLC, you will need to get an EIN because the LLC must file a partnership return and provide K-1s to members of the LLC. Each LLC member will pay taxes to the IRS on their individual tax return.
Why Should A Businesses Get an EIN?
No matter what kind of business you have, it is usually a good idea to get an EIN. Here are some advantages of having an EIN:
Most banks require an EIN in order to open a business banking account.
- A business bank account will simplify the process of tracking and managing your professional expenses.
- You can also build business credit and qualify for more loans.
You will need an EIN before you can hire employees.
- Employees will file their taxes separately under the LLC’s 1040 form.
- Employers need an EIN to set up payroll, and the IRS will use the business’s EIN to track payroll taxes.
- An EIN is necessary to register for your State's employer taxes.
If you’re a single-member LLC, an EIN helps you maintain your corporate veil.
- The corporate veil protects business owners from personal liability for the business’s debts.
- Maintaining the corporate veil also establishes credibility and professionalism by allowing your business to have its own identity separate from its owners.
An EIN will help to prevent identity theft.
- Your Social Security number (SSN) will be more private.
- It’s less likely for someone to break into your accounts when you keep business finances and personal finances separate.
Read more about the benefits of getting an EIN here.
How To Get a Free EIN
The quickest and simplest way to get a free EIN is to apply on the IRS website.
Here is some helpful information to guide you in requesting your EIN:
- The IRS’s hours of operation for obtaining your EIN are Monday-Friday from 7 a.m. to 10 p.m
- Only United States and U.S. Territories-based businesses are eligible
- You must have a valid Taxpayer Identification Number (SSN, ITIN,EIN)
- The entity owner or responsible party may only apply once per day
- Your application must be filled out in one session and cannot be saved
- The session will time-out after 15 minutes if not in use
- You will immediately get an EIN after the form is completed
- Applications cannot be processed if an EIN was previously obtained online
You can also apply for an EIN by fax or mail by completing Form SS-4. If you are submitting by fax, send your EIN application to fax number (855) 641-6935. If applying by mail, submit to Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999.
You will need to answer the following questions:
- What type of business do you wish to start? (LLC, Sole Proprietorship, Corporation, etc.)
- How many owners does your business have, and in what state is your business located?
- Why are you applying for an EIN?
- Who will be the “responsible party” or principal officer of the business?
In addition, you will need to fill out the name, SSN or TIN, and contact information of your business’ responsible party.
If you don’t have a SSN and you are not a U.S. citizen, you can still get an EIN. Simply download and fill out IRS Form SS-4. You can leave section 7b blank.
To submit your application, call the IRS at 267-941-1099 (NOT a toll-free number) Monday through Friday between 7:00 a.m. and 10:00 p.m. Eastern Standard Time. You may also apply for an EIN by fax at 304-707-9471.
This phone number is not toll free. We recommend using a web calling service to save money on the call. You should expect to spend up to an hour on the phone before you get your EIN. Since Mondays are the busiest day for the IRS to receive calls, we suggest calling any other day of the week.
Frequently Asked Questions
1. Do I need an EIN if I’m self-employed?
You don’t need an EIN if you’re self-employed; you can simply use your Social Security number. However, some people who are self-employed choose to apply for an EIN instead of using their Social Security number to reduce the risk of identity theft; it’s less likely for someone to break into your accounts when you keep business finances and personal finances separate.
2. Is there a difference between an EIN and a TIN?
No, there is not a difference between an Employer Identification Number (EIN) and a Taxpayer Identification Number (TIN). Both refer to the nine-digit number issued by the IRS for your business.
3. Is there a difference between an EIN and a FEIN?
No, there is not a difference between an EIN and a Federal Employer Identification Number (FEIN). A FEIN can also be referred to as a Federal Tax Identification Number.
4. How do I look up my EIN?
It is very easy to look up your EIN, and there are several ways you can do so. First, the IRS will typically email or send a physical letter confirming your EIN application. You can also check business documents such as tax returns to find your EIN printed there.
5. How do I look up another business’s EIN?
You can look up another business’s EIN by searching for the company on the Securities and Exchange Commission (SEC) EDGAR online Forms and Filings database.
6. How do I recover my EIN if I forget or lose it?
If you still aren’t able to find your EIN by checking for a confirmation email or letter, or by identifying it on your business documents, you can simply call the IRS EIN Department at 1-800-829-4933 to speak with one of their representatives. Their hours of operation are Monday-Friday from 7 a.m. to 7 p.m.
7. What is the difference between an EIN and a DUNS number?
An EIN is a nine-digit number issued by the IRS to keep track of a business’s tax reporting. The Data Universal Numbering System (DUNS) a nine-digit number issued by Dun & Bradstreet, a business analytics company; a DUNS number helps businesses create and identify their credit reports.