This quick turnaround time is especially beneficial for new businesses that need to start operating and managing their tax obligations as soon as possible. The EIN application process can be completed online, by mail, or fax, and requires relevant details about the business and its owner(s). An Employer Identification Number (EIN) is a unique nine digit number assigned by the Internal Revenue Service (IRS) for taxation purposes of any business entity. When registering as a business entity for tax purposes, several different TIN options are available. As we mentioned above, not all TIN options apply to businesses, and not all businesses need an EIN.

What Is an EIN Number? A Complete Guide

• But many financial institutions require an EIN to open a business account.
• If you are offering products or services as an operating business, you will need a FEIN.
• They must rely on suppliers, vendors, and general cooperation from other companies.
• Give our guide a read to learn more about the types of businesses that need it, ways of applying and obtaining one, and all the benefits you’ll enjoy once you get it.
• An SSN’s format is xxx-xx-xxxx, while an EIN’s format is xx-xxxxxxx.

Another benefit of an EIN is that it keeps your personal finances separate from those of your business. This can be especially beneficial to self-employed individuals (such as subcontractors) who must provide an identification number for tax reporting purposes to those who hire them. The Bakery Accounting Internet EIN application is the preferred method for customers to apply for and obtain an EIN.

Individuals.

All business types can apply for an EIN, even a sole proprietorship. For example, say Subhash decided to open a specialty grocery store as a limited liability company (LLC). Upon registering his business with his state, Subhash also was required to apply for an EIN with the IRS. To do so, Subhash logged on to the IRS website and entered his personal and business information.

Complete Form SS-4

Getting an EIN is a free service provided by the IRS, which can be completed online, by fax, or mail using Form SS-4. An EIN is similar to a Social Security number but is used specifically for business entities. It’s required for various activities such as filing tax returns, opening business bank accounts, applying for business licenses and permits, hiring employees, and conducting other financial transactions.

• For example, if you’re a contractor who works with a large number of clients, disclosing your Social Security number may expose you to identity theft.
• TriNet does not control such web sites and is not responsible for their content.
• The Third Party Designee section must be completed at the bottom of the Form SS-4.
• Don’t forget to check if you have a valid Taxpayer Identification Number (SSN, ITIN, another EIN) before starting.
• Wholesale distributors may also require an EIN check before they’ll do business with a retailer.
• This facilitates the management and reporting of the retirement fund contributions to the relevant bodies.

An EIN helps demonstrate to the IRS that you actually have a business. Sole proprietors and single-member LLCs without employees don’t always need EINs, but there are benefits to getting one. We believe everyone should be able to make financial decisions with confidence.

Apply online

Compliance with IRS requirements depends heavily on this number for smooth transaction and reporting processes. To apply for an EIN, an entity can complete an online application through the IRS website or submit Form SS-4 by mail or fax. The online application offers immediate issuance of the EIN upon completion. Submission purpose of ein number by mail may take several weeks, so many choose the online option for quicker processing. Understanding the intricacies of the IRS can be daunting, especially when it comes to essential documents like the Employer Identification Number (EIN).

Use this tool to get an EIN directly from the IRS in minutes for free. Wholesale distributors may also require an EIN check before they’ll do business with a retailer. Our partners cannot pay us to guarantee favorable reviews of their products or services.

Apply by Fax

For estates, the limitation is applied to the decedent (decedent estate) or the debtor (bankruptcy estate). This limitation is applicable to all requests for EINs whether online, telephone, fax, or mail. If you don’t have an EIN by the time a return is due, write “Applied For” and the date you applied in the space shown for the number. If you don’t have an EIN by the time a tax deposit is due, send your payment to the Internal Revenue Service Center for your filing area as shown in the instructions for the form that you are filing. Make your check or money order payable to the “United States Treasury” and show your name (as shown on Form SS-4), address, type of tax, period covered, and date you applied for an EIN. Under current federal law, if an estate generates more than $600.00 in income, the Personal Representative must file a separate tax return known as a Form 1041.

Multiple EINs or entities

But many financial institutions require an EIN to open a business account. Many sole proprietors and single-member LLCs aren’t required to have an employer identification number if they don’t have employees. Instead, they can generally use their Social Security number or Individual Taxpayer Identification Number when filing their business taxes. Some corporations, limited liability companies, and other entities may be required to report information on beneficial owners (the people who ultimately own or control the company) to the U.S. Department of retained earnings the Treasury’s Financial Crimes Enforcement Network (FinCEN). The EIN is used by businesses and employers to report employees’ wages and withhold income taxes from paychecks.