What exactly is an EIN?

How to Apply for and Receive a Free IRS Employer Identification Number

An Employer Identification Number (EIN), also known as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN), is a business’s equivalent of a Social Security number (SSN). The Internal Revenue Service (IRS) uses the unique nine-digit EIN number to identify firms for tax reporting.

Continue reading our What is an EIN article to find out whether your company need an EIN and how to apply for one for free at the IRS website through internet, phone, fax, or mail.

Is an EIN Required for My Company?

When does the IRS need an EIN?

The Internal Revenue Service (IRS) has particular guidelines that govern when you must apply for an EIN for your firm.

If any of the following statements apply to you, you must get an EIN:

Your company employs people.
Your company or partnership
Your company pays excise taxes.
Nonwage income paid to a nonresident foreigner is taxed by your company.

The sole proprietorship

If your company is a sole proprietorship with no workers (and does not submit any excise or pension plan tax returns), you do not need to get an Employer Identification Number (EIN).

An EIN is essential for sole entrepreneurs with workers.

Taxpayers should get an EIN number in order to create a company bank account, improve business credit, and reduce the danger of identity theft.

One-Member LLC

If your company is a single-member LLC with no workers (or excise tax liabilities), you do not need to get an Employer ID Number.

If they have staff, single-member LLCs must obtain an EIN.

It is nevertheless encouraged (and often essential) to create a bank account, recruit staff afterwards, and keep your corporate veil intact.

Partnerships or Multi-Member LLCs

If your firm is a partnership or a multi-member LLC, you must get an EIN number because the LLC must file a partnership return and give K-1s to its members.

Corporations

You must have an EIN for tax reporting reasons if you have a S company tax structure.

If you have a C corporation, your company is treated as a distinct entity, and you must get an EIN for tax reporting reasons.

Nonprofit Corporations

If your company is a nonprofit, you must obtain an Employer ID Number for tax reporting reasons.

Estates and Trusts

Under various conditions, EINs are utilized for particular sorts of trusts and estates.

When Should a Company Obtain an EIN?

It is always a good idea to get an EIN number regardless of the kind of company you operate. When opening a business bank account or registering for a company credit card, you must provide your EIN.

To create a business banking account, most institutions demand an EIN.

A corporate bank account will make it easier to monitor and manage your professional costs.
You may also improve your company credit and become eligible for additional loans.

Applicants for International EIN

You may still get an EIN number if you do not have an SSN and are not a US citizen. Simply download and complete the IRS Form SS-4. Section 7b can be left blank.

To submit your application, call the IRS at 267-941-1099 (NOT a toll-free number) between 7:00 a.m. and 10:00 p.m. Eastern Standard Time, Monday through Friday. You can also obtain an EIN by fax at 304-707-9471.