Employer Identification Number
What is an EIN?
An EIN, or Federal Tax Identification Number, is a unique nine-digit number the Internal Revenue Service (IRS) assigns to identify a business entity. An EIN number is a distinctive marker, much like a Social Security Number for individuals. It is crucial for legal and financial transactions, including tax filings, hiring employees, and establishing business credit.
Keep In Mind
Benefits of Obtaining EIN Number
01
Avoiding Tax Penalties
EIN number helps your business steer clear of tax penalties. By having this unique identifier, you ensure the IRS recognizes and tracks your business separately. If you file taxes without an EIN number, it can lead to audits and tax penalties.
02
Hiring Employees
An EIN number will be required if your company plans to hire staff for payroll and employment taxes, ensuring that the hiring process is legal.
03
Opening a Business Bank Account
A valid EIN is required for the opening of a business bank. You can separate your personal and business finances, making it easy to track and manage your business expenses and income.
04
Establish Business Credit
Having a business bank account with an EIN number helps build credit with the bank. If a vendor or client checks your business credit, they will see your business as reliable and trustworthy.
05
Prevent Identity Theft
Obtaining an EIN number for your business acts as a safeguard against identity theft. By using this unique identifier for business transactions, you reduce the risk of exposing your personal Social Security Number.
How to Obtain an EIN Number?
Obtaining an EIN number is a straightforward process that can be done online, by mail, by fax, or by telephone.
Online Application: The quickest way to obtain an EIN number is to apply online through the IRS website. All you have to do is visit the IRS website and complete the online application form. It is available 24/7 and allows for instant EIN issuance upon successful submission.
Mail or fax Application: Alternatively, you can complete Form SS-4 and submit it via mail or fax to the appropriate IRS office. This method typically takes longer to process. The process takes a few weeks by mail.
Questions about EIN Number
Yes, but having an EIN number is advisable to protect your personal information and simplify business dealings.
An EIN number is typically required to open a business bank account.
Form SS-4 is the application for an Employer Identification Number (EIN) submitted to the IRS to obtain this unique identifier for your business.
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