How to get an Employer Identification Number (EIN)
Are you thinking of starting a new business this year? Or are you planning on buying an existing one? If so, one of the first things to figure out is how to get an EIN.
An EIN, short for Employer Identification Number, is a unique number to your business used for federal tax purposes. Your state will issue a separate identifying number that you’ll use for filing your state tax return.
An EIN is similar to a Social Security number (SSN) – but instead of it being issued per individual, it’s issued for a business. Both EINs and SSNs are a type of tax identification number.
Your EIN is used as you complete your business tax return, to open a business banking account, to file important financial documents, and so much more. Thus, it’s necessary for almost all instances to get one.
How to apply for an EIN number
But if you’re curious about how to apply for an EIN number – there is a process to it. So, you can’t assume outright as you start your business that you have one. Here are the steps to take to apply for an EIN number:
1 – Determine if you need one
Believe it or not, not every business needs an EIN. But most do. Here are some of the instances where you may need an EIN:
- If you employ W-2 employees or withhold taxes on salaries paid out by your business
- If you changed the legal structure of your business
- If you utilize independent contractors
- If you formed a business also registered with your state, like an LLC, corporation, or partnership
- If you pay excise tax, tobacco tax, alcohol tax, or employment taxes
- If you use a tax-deferred pension plan
- If your business works with nonprofits, trusts, estates, or farm cooperatives
- If you purchased an existing business
2 – Apply for an EIN
There are many ways you can obtain an EIN: by mail, phone, fax, or online. The easiest way to apply for an EIN is on the IRS’ website.
If you choose the online EIN route, you will obtain an EIN instantaneously. We’ll walk you through the IRS tool in the next step.
Need help obtaining an EIN? Consider using using a document filing service such as MyCorporation. They can quickly and easily file for an EIN with the IRS on your behalf.
3 – Fill out some questions
First, indicate your business’ legal structure. Your options are:
- Sole proprietor
- LLC – This is the preferred organizational structure for an aspiring single small business owner.
- Other type, such as a nonprofit, volunteer group, or homeowners association
The IRS copy on the first page of this tool states that you should already have determined your entity type before you request your EIN. If you haven’t done that yet or aren’t sure where to begin, we’re here to help. Check out our business entity 101 post.
Want more in-depth help with choosing a business entity? Turn to one of our small business certified tax pros. We can analyze business entity options for you as part of your tax prep.
After you choose your structure, there are a couple additional screens where the IRS outlines the legal structure, so you can confirm you properly classified your business.
Moving on to the next step, you will then choose the best option for applying for an EIN. The options are:
- Started a new business
- Hired employees
- Banking purposes
- Changed business types
- Purchased an active business
After that, you’ll authenticate your identity by filling out your name and Social Security number or individual tax identification number. Then choose if you’re the operator (or responsible party in a partnership or corporate officer who can legally bind the corporation) or are filing the application as a third party on someone’s behalf.
Next, you’ll fill in your business’ address. If you are a home business, fill in your home address.
Finally, you’ll fill out additional business information.
4 – You’ll receive a document with your EIN from the IRS
After completing each section on the IRS website, you’ll get a document with your EIN. You can use it right away. You should save your IRS documentation of your EIN, as it will be used in many future instances, including filing your small business tax return. The ease of obtaining the PDF of the EIN from the IRS may cause some aspiring small business owners to deemphasize its significance. But, it’s important to keep and store in a safe place.
Once you get the EIN number, you can’t cancel it. But if you don’t need the EIN, the IRS can close your business account. But it can be re-accessed at any time.
How to find your EIN
If you’re wondering how to find your EIN if you misplaced it, first check your bank records or a previously filed business return. If you still can’t find it, you can call the IRS business and tax specialty line at 1-800-829-4933. The hours are 7:00 a.m.- 7:00 p.m., Monday through Friday.
Alternatively, you can try to find the computer-generated notice you got when initially creating the EIN. You can also find your EIN by calling the bank where you handle your small business banking or a previous years’ tax return.
Getting small business tax help after you submitted your tax ID application
If you have questions about small business taxes, bookkeeping, or payroll, we’re here to help. With more than 2.5 million small business clients, rely on our Block Advisors small business certified tax pros to keep your business on track. Make an appointment now!