What is an EIN?

An Employer Identification Number (EIN) is a nine-digit number assigned to your business by the Internal Revenue Service (IRS). Similar to a Social Security Number for individuals, it is an exclusive nine-digit number it identifies your business for tax purposes. It is required for paying employees and managing taxes.

Who is Required to have an EIN?

Business Structures Requiring EINs

The following business structures are require EINs:

• Partnerships
• Limited Liability Companies (LLCs)
• Corporations

Do Sole-Proprietorships Require EINs?

In general, sole-proprietorships do not require an EIN number., Instead, the sole-proprietor typically uses the social security number (SSN) as their tax-identification number (TIN) to file taxes. Exceptions to this statement, however, due exist. For example, any sole-proprietorship that hires employees or independent contractors may need an EIN. Due to the complexities and ever-changing nature of tax guidelines, all business owners are encouraged to consult with a qualified tax professional to discuss their specific situation.

How Do I Apply an EIN?

Interested parties should apply for an Employer Identification Number through the Internal Revenue Service. The process of applying for an EIN is a free service offered by the IRS. Applications can be made online via IRS.gov. Additionally, paper applications can be made by mail or fax via Form SS-4. The process of applying for an EIN is a free service offered by the IRS. Beware of websites on the Internet that charge for this free service.