An Employer Identification Number (EIN) is a business’s equivalent of a Social Security number (SSN). EINs are used by the Internal Revenue Service (IRS) to identify taxpayers and maintain track of a company’ tax reporting.
An EIN is also known as a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN).
It’s critical to understand if your company needs an EIN and what procedures you’ll need to take to get one.
Topics:
Meaning and Definition of EIN
Do I need an EIN?
The Advantages of Having an EIN
How to Obtain an EIN
EIN Frequently Asked Questions
Meaning and Definition of EIN
An Employer Identification Number (EIN) is a nine-digit number issued by the IRS to companies in order to identify them.
A Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN) is another name for an EIN (FTIN).
Although not all companies need an EIN, many do. As a result, even if it isn’t necessary, it may be a good idea to have one since it may provide various benefits.
Do I need an EIN?
Certain kinds of company formations are required by the IRS to obtain an EIN, while others are not. The first thing to understand is that if you have workers, you must acquire an EIN. However, it is not the only reason you will need an EIN.
The following firms are exempt from having an EIN:
No-employee sole proprietorships that do not submit excise or pension plan tax returns
LLCs with just one member and no workers or excise tax liabilities
Even though an EIN isn’t necessary for certain sorts of firms, it’s a good idea to get one regardless. In the next part, we’ll go through some of the reasons why you should acquire an EIN.
An EIN is necessary for the following businesses:
C corporations
S organisations
LLCs with many members
Partnerships
Nonprofits
Trusts
Employeed sole proprietorships
Employees in single-member LLCs
The Advantages of Having an EIN
Even if an EIN is not necessary for your company, obtaining one might bring various advantages. An EIN, in particular, may make it simpler for you to:
Create a Business Bank Account: To open a business bank account, most banks demand an EIN.
Hire Employees: If you want to employ people, you must acquire an EIN. Even if you don’t have any workers yet, obtaining an EIN today will save you time and money if you decide to recruit any in the future.
Maintain Your Corporate Veil: If you run a single-member LLC, obtaining an EIN will offer a clear distinction between your company and personal accounts, allowing you to avoid personal responsibility.
Prevent Identity Theft: As a lone owner, you enhance your chances of being a victim of identity theft.
How to Obtain an EIN
The EIN Assistant on the IRS website is the fastest and easiest method for taxpayers to get an EIN.
You may also apply for an EIN by fax or mail using Form SS-4. Submissions via fax should be sent to 855-641-6935. Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999 is the mailing address for postal submissions.
When applying online, you must provide the following details:
Your firm structure, such as a limited liability company (LLC), corporation, or sole proprietorship.
The number of owners in your company
Your company’s location
Your reason for requesting an EIN
Your company’s “responsible party”
Applicants for International EIN
You may still get an EIN if you do not have an SSN and are not a U.S. citizen. Simply download and complete Form SS-4. Section 7b may be left blank.
To submit your application, contact the IRS at 267-941-1099 (NOT a toll-free number) between 7 a.m. and 10 p.m. Eastern Standard Time, Monday through Friday. You may also get an EIN via fax at 304-707-9471.
EIN Frequently Asked Questions
Do I need an EIN if I work for myself?
If you are self-employed, you do not need an EIN; just use your Social Security number (SSN). However, some self-employed individuals seek to get an EIN in order to decrease their vulnerability to identity theft.
Is there a distinction to be made between an EIN and a TIN?
No, an Employer Identification Number (EIN) and a Taxpayer Identification Number (TIN) are the same thing (TIN). Both relate to the IRS nine-digit number assigned to your company.
What is the difference between an EIN and an FEIN?
No, an Employer Identification Number (EIN) and a Federal Employer Identification Number (FEIN) are the same thing (FEIN). An FEIN is also known as a Federal Tax Identification Number (FTIN).
How can I find my EIN?
It’s fairly simple to check up your EIN, and there are various options. To begin, the IRS will normally email or mail you a letter verifying your EIN application. You may also look for your EIN on company papers such as tax returns.
How can I search for the EIN of another company?
You may find another company’s EIN by looking for it in the Securities and Exchange Commission’s (SEC’s) EDGAR database.
How can I get my EIN back if I forget or lose it?
If you still can’t locate your EIN after looking for a confirmation email or letter, or recognising it on your company paperwork, contact the IRS EIN Department at 1-800-829-4933 to talk with a professional. The department is open from 7 a.m. to 7 p.m. Monday through Friday.
What exactly is the difference between an EIN and a DUNS number?
An Employer Identification Number (EIN) is a nine-digit number assigned by the IRS to businesses in order to maintain track of their tax reporting. A Data Universal Numbering System (DUNS) number is a nine-digit number provided by the business analytics firm Dun & Bradstreet. A DUNS number assists firms in creating and identifying credit reports.