If you are starting a business or have recently launched one, you may have heard the term “EIN number” being thrown around. An EIN number (an Employer Identification Number) is a unique nine-digit tax identification number assigned by the Internal Revenue Service (IRS) to businesses for tax purposes.
Think of it as your business’s social security number. It helps the IRS to identify your business for tax reporting and filing purposes.
Learning how to obtain an EIN number is a crucial step in setting up a business as it enables you to file taxes, hire employees, open a business bank account, and apply for loans. In this blog post, we will discuss the steps you need to take to obtain an EIN from the IRS.
Step 1: Determine Your Eligibility
Before applying for an EIN number, you need to determine whether your business is eligible for one. The IRS issues EINs to sole proprietors, partnerships, corporations, LLCs, non-profit organizations, estates, trusts, and other entities that require a tax identification number.
Step 2: Gather Your Information
To obtain an EIN number, you need to provide the IRS with certain information about your business. This includes your legal name, trade name, address, type of business entity, the date your business started, the number of employees, and the reason why you are applying for an EIN number.
Step 3: Choose a Method to Apply
There are several ways to apply for an EIN number. You can apply online, by mail, by fax, or by phone. However, the online application is the fastest and most convenient method. It takes only a few minutes to complete and receive your EIN number.
Step 4: Complete the Application
If you choose to apply for an EIN number online, you will need to visit the IRS website and complete the online application form. The form will ask for information about your business, such as your legal name, address, and type of business entity. Once you have completed the form, you will receive your EIN number immediately.
Step 5: Keep Your EIN Number Safe
Once you receive your EIN number, make sure to keep it in a safe place. You will need it for tax reporting and filing purposes, as well as when opening a business bank account or applying for a loan.
Obtaining an EIN number is a crucial step in setting up a business. It helps the IRS to identify your business for tax purposes and enables you to file taxes, hire employees, open a business bank account, and apply for loans.
The easiest way to get your business up and running is to get setup with an LLC formation service that provides an EIN and business bank account in their package. We’ve found Incfile to be the best service for streamlining setup of your new business. Learn more about Incfile here.