When it comes to the IRS, there are several different numbers that used for different purposes. As a business owner, it can be confusing. In this article, we will discuss the purpose of the EIN number, who needs one, and how to get one.
What is an EIN Used For?
EIN Stand For Table of Contents
EIN stands for Employer Identification Number. It is sometimes referred to as a federal tax ID number, federal employer number, and a few other names. The EIN is one of several types of tax ID numbers that are used by the IRS.
An EIN is a number that is used by the IRS to identify employers for tax purposes. It appears on all tax filings associated with the company it identifies. Think of it as a social security number for a business.
Aside from IRS tax documents, you’ll need your EIN for other business functions. You may need it to apply for a business license. You will also need it to apply for bank accounts and funding for your business. If you have employees, you will need your EIN to hire and pay them, as well.
Who Needs an EIN?
Surprisingly, not all businesses are required to have an EIN. Sole proprietorships have the option to apply for an EIN or use the owner’s social security number. However, opting for an EIN can give your business more credibility in the with vendors. An EIN is just one type of Taxpayer Identification Number or TIN. Here is a list of the different types of TINs and who needs them:
- Social Security Number (SSN): A social security number is used to identify a specific person for tax purposes. It’s a nine-digit number that can be used over the course of a person’s lifetime to track their earnings, as well as how many years they worked. Social security numbers are issued to US residents, permanent residents, and temporary residents.
- Employer Identification Number (EIN): This is also a nine-digit number, as discussed above. It is issued to businesses operating within the US. It can also be issued to estates and trusts if there is income to be reported in those accounts.
- Individual Taxpayer Number (ITIN): Individuals who don’t have a social security number, such as foreign nationals and undocumented immigrants can receive an ITIN. This number is used for tax purposes only and does not impact their immigrant status. It is a nine-digit number.
- Adoption Taxpayer Identification Number for Pending U.S. Adoptions (ATIN): This is a temporary number given to children who are involved in domestic adoptions in the US. Their adoptive parents will use this number for the child if they don’t know or have the child’s social security number.
- Preparer Taxpayer Identification Number (PTIN): All paid tax preparers who operate in the US are required to have a PTIN. This number will appear on all tax returns prepared by that individual. This applies to both foreign and domestic tax preparers if they are operating in the US.
How to Get an EIN
Before applying for an EIN, you must first file your business with your secretary of state. In other words, you must form a legal business entity first, and then you may apply for an EIN.
Securing an EIN for your business is most easily done via the IRS website. However, if you prefer an in-person consultation, USPS, or fax, those options are also available. Here is a breakdown of each option and how it works.
Get an EIN Online
If you want the most efficient option for obtaining an EIN, we recommend applying for it online. Simply navigate to the IRS website and enter all the pertinent information about your business. It will be helpful to have IRS Form SS-4 available at this time. Form SS-4 will have all of the information you’ll need to fill out the application completely and accurately.
In most cases, the website will validate the information at the time of application. If all is well, the website will generate an EIN immediately and you’ll be good to go. If there are any discrepancies, it will tell you that, as well.
Get an EIN via Mail
If you’re not comfortable entering your information online, you have the option to apply via US Mail. With this option, you’ll need to first download and print an EIN application. If you don’t have access to a printer, you can stop by your local IRS office to pick up an application.
Use your IRS Form SS-4 to complete the EIN application. As previously mentioned, all the necessary information will be included on this form and help you complete the application accurately. Once complete, mail the form to the address listed on the application. If there is no address listed on your application, use this one:
Internal Revenue Service
ATTN: EIN Operation
Cincinnati, OH 45999
Get an EIN via Fax
You may also choose to apply for your EIN using a fax machine. If this is the case, you will follow the steps described under the “get an EIN by mail” section. You’ll need to fill out the application in its entirety and fax it to the IRS: (855).641.6935
How to Find My EIN
If you already have an EIN but have misplaced it, don’t worry! Here are a few places you can look to find your EIN before contacting the IRS:
- Review bank documents such as bank account statements and loan applications. Your EIN would have been required on these documents.
- Look at your tax documents for any tax returns that have been filed for your business. The EIN would’ve been included on these.
- Look for a copy of the application for your business license, if applicable. Most business licenses require an EIN.
If all else fails, you can call the IRS directly and ask for your EIN. (800).829.4933 Be sure to have your IRS Form SS-4 nearby to answer the agent’s questions. You also need to make sure that you’re listed on the business as an owner or primary member. Otherwise, the IRS will not give you any information.
For more information on EIN numbers and why you may need one, check out some of our other posts discussing EIN and ITIN numbers.
