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An employment identification number, or EIN is used when you start a business. It consists of nine digits in a xx-xxxxxxx format and is used to identify the business entity on tax forms, payroll documents, and all other correspondences to both the IRS and Social Security Administration. In some cases an EIN is necessary to open a business account strictly for the purpose of satisfying a banking institution. Individuals are always required to use their social security number and are never allowed to replace that number with an EIN. EINs are free to obtain through the IRS and can even be applied for through an on-line application. |
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Step 1 Corporations, sole proprietors with partners, and all companies with employee and or pension plans require an Employment Identification Number. In addition, any businesses that terminate a partnership and take on new partners will need to apply for a new EIN. Step 2 The easiest way to apply for an EIN is to go to www.irs.gov and use the EIN assistant to submit your application on-line. You can also call the IRS at 800-829-4933 and obtain the EIN immediately. Alternatively you can complete a form SS-4 and mail or fax it to the IRS. This method will take longer as there is processing time involved. Step 3 Regardless which method you decide to use, you will need to have the legal name of your business, what type of entity it is, your reason for the application, and the personal information of the principle officer in the company. It is important that you have already filed the appropriate forms within your county and or state such as a fictitious business statement (also referred to as "doing business as" or "d.b.a." statement) or articles of incorporation to ensure that the legal name you are supplying to the IRS is one you can use. Step 4 You will use your EIN on all tax and government forms as well as on payroll documents. This number uniquely identifies your business to the federal government much in the same way a social security number does for an individual. Also, some banks require you to use an EIN when opening a business bank account. |
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