To prevent future complications, retain a copy of your EIN in a secure and readily accessible location. If you’re unsure whether you need a new EIN after a change in your business, it’s always best to err on the side of caution and contact the IRS directly for guidance. If you elect a different taxation for your business, you will instead use Form 8832 to update the IRS. Note that having an EIN is necessary if your business pays employees or independent contractors. All TaxAct offers, products and services are subject to applicable terms and conditions. Your address will be checked with USPS, and you’ll have a chance to fix it if needed.

Applying for an EIN by Mail

An employer identification number (EIN) is a unique nine-digit identifier that the Internal Revenue Service (IRS) assigns to individual businesses. It serves as an important means of identifying the business for financial and legal purposes. The easiest way to do this is by completing an online application on the IRS website.

• A business or any other entity that is obligated to have one can only have one EIN.
• While a virtual private network won’t make you completely anonymous, it can improve your privacy, security, and control over your online experience.
• EIN numbers are generally permanent and do not need to be renewed.
• However, some sole proprietors choose to get an EIN number anyway to protect their identity.
• Even if not required, obtaining a Tax ID for LLC is a best practice to separate personal and business finances.

Step 2 – Gather Required Information

However, a single corporation can use one EIN for multiple DBAs (Doing Business As) under its umbrella. If you prefer not to apply online, you can complete Form SS-4 and mail or fax it to the IRS. The processing time is longer compared to the online application method. Some business owners dislike the learning curve of business tax filings and compliance requirements that come with using an EIN.

EIN vs. federal tax ID vs. TIN

However, some sole proprietors choose to get an EIN number anyway to protect their identity. An EIN is required by the Internal Revenue Service (IRS) in the United States to identify your business for tax purposes. https://www.bookstime.com/ It is used for reporting employment taxes, filing tax returns, and conducting other business-related activities.

Below is a breakdown of when you need a new EIN by entity type. Getting an EIN for an international applicant involves a little more paperwork, so you’ll want to follow these instructions from the IRS. Get free guides, articles, tools and calculators to help you navigate the financial side of your business with ease. Charity Navigator’s Giving Basket empowers you to support multiple charities in one convenient checkout while controlling how much of your information you share with each organization. You can use Charity Navigator to find and support thousands of charities that align with your passions and values.

Information to Prepare before Applying Online

However, additional fees may apply depending on the services used during the application process. An EIN is used for business tax transactions, while an ITIN Cash Flow Statement is used for individual taxpayers who do not have a Social Security Number. EIN is necessary for business tax filings, and ITIN is required for individual tax filings. To file a tax return, you must complete the forms specified by the IRS and submit them with the necessary documentation. If you’re a sole proprietor and you have or decide to hire employees, then you’ll need to get an EIN.

Content types

If a business is not legally formed, they may be subject to automatic revocation of their tax-exempt status. It is for U.S. residents or nonresident aliens that must file a U.S. tax return and presently do not have a federal tax ID number. This includes anyone who does not have or is not eligible for an SSN. The IRS will issue an ITIN, a tax processing number with limited functions, to keep individuals in compliance with U.S. tax laws.

• Our team of pros will set everything up and import your employees’ information for you.
• Before you start the application process, make sure you know (or decide) who is the primary owner of your business, because you’ll need that person’s social security number in order to apply.
• You use it to pay federal taxes, hire and pay employees, open a business bank account, and apply for business licenses and permits.
• A small tech startup begins with two founders (LLC taxed as a partnership) using an EIN.
• Here’s a look at why you should consider applying for one and how to do so.
• Certain links may direct you away from Bank of America to unaffiliated sites.

Bank of America does not deliver and is not responsible for the products, services or performance of Bizee. You are responsible for separately purchasing Bizee’s products or services. Bank of America and/or its affiliates or service providers may receive compensation from third parties for clients’ use of their services.

The benefits of business incorporation

The IRS requires an EIN for certain types of businesses, including corporations, partnerships, and LLCs with employees. Sole proprietorships and single-member LLCs without employees usually don’t need an EIN, but there are still benefits to having one. If you don’t need an EIN for federal tax purposes, you can still request one for banking or state tax purposes. EINs are not intended for other activities, such as state tax lien auctions, sales or lotteries. For this reason, a sole proprietor may choose to get an EIN number that they can use on business entity applications in order to avoid having to give out their SSN except what is an ein number when necessary. If your business is based in the U.S., you can apply for an EIN online at the IRS website and receive it immediately.