Small Business Resources is now the Center for Business Empowerment.
July 10, 2023 | 3 minute read
Answered by
Brad Tyler
Business Strategy & Intelligence Manager
Bank of America
Applying for an Employer Identification Number (EIN) is a key step whether you are starting, running or growing your business. Here’s a look at why you should have one and how to get it.
An EIN, a type of Taxpayer Identification Number (TIN) used by the IRS, identifies a business for tax reporting purposes, much like a Social Security number does for individuals. The IRS will provide you with a unique nine-digit EIN for free.
Any business that has employees, including a sole proprietorship, needs to have an EIN. Businesses are required to have one when they file an employment tax return.
However, a business must get an EIN under other circumstances, including, but not limited to, if:
Beyond helping tax authorities identify your business, an EIN can help you establish your business as an entity separate from yourself for the purposes of building a business credit profile— having your business as a separate entity may protect you from legal liabilities. An EIN may be required by financial institutions when you apply for a business bank account or a business loan.
The easiest way is via the IRS website. Once you’ve completed Form SS-4 online, in most cases you’ll get your number immediately. Or you can print out the form and mail or fax it.
Additionally, for a fee, third parties like Incfile can help you file for an EIN as part of their business formation services.
To learn more about the steps to launch a new business, including how to form your business with an exclusive offer from Incfile, you can visit the Bank of America Start a Business Center.
You’ll need to provide your name and those of any other business owners, your Social Security number or another type of TIN, business name, mailing address, type of business entity, reason for applying, the date the business was started or acquired, the highest number of employees you expect to have on payroll in the next 12 months, and the first date you paid or will pay wages.
If you forget your EIN, you can find it on your tax return, applications for a bank account or credit, state licenses and permits. You also can find it on tax forms you’ve filed to report any work you’ve done as an independent contractor or any payments made by your business.
There are no set rules on when to apply. Generally, all businesses need EINs, and the EIN generally should be obtained as soon as the entity is formed or acquired (or if the business experiences a change requiring an EIN as discussed above). Given how handy an EIN is, the sooner, the better.
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