The EIN
It’s Like a SSN for your Business!
What is an Employer Identification Number (EIN)
The EIN is a 9 digit Identification number which is assigned to your business by the IRS. This ID number is unique to your business, just as your SSN is a 9 digit identification number unique only to you. It may also be referred to as a TaxID number, TIN or FEIN.
You will find that all businesses don’t need an EIN, like DBAs, Sole proprietorships and single member LLCs.
Who Needs an EIN
You will need an EIN if your business:
- is a non-profit
- is partnership or corporation
- has employees
- will file Excise, Employment, Alcohol, Tobacco and Firearms taxes.
The Benifits of an EIN
The EIN provides you with the ability to:
- build business credit
- open a business bank account
- get business loans
- get business credit cards.
Note: Although sole-proprietorships and single-member LLCs are not required to have an EIN, you wont be able to take advantage of these benefits which help to scale your business. Additional business opportunities maybe missed because you don’t have this 9 digit number.
Additional Considerations About the EIN
Additional Considerations about the EIN
If you plan to hire employees, open a business bank account, or file certain federal tax returns, you are required to have an EIN. An EIN is also required if your LLC has multiple members, even if you do not have employees.
An EIN serves as a unique identifier for your LLC, similar to a social security number for an individual. This allows you to establish credit, apply for business licenses, and file taxes under your LLC’s name.
Having an EIN can help protect your personal privacy by allowing you to use your LLC’s tax ID number instead of your personal social security number when conducting business transactions or applying for loans.
Obtaining an EIN can enhance your LLC’s professional image and make it easier to do business with other companies.
Overall, obtaining an EIN is an important step when forming your LLC. You can apply for an EIN directly on IRS.gov website or by mail, and the process is generally quick and easy.
