A federal employer identification number is a nine-digit number that works for your business in much the same way that your personal social security number works for you. In addition to acting as an identifier for your business for the Internal Revenue Service, the number provides several other benefits.
- It allows you to obtain licenses to sell alcohol, tobacco or firearms, among other things
- You can use your company’s EIN to open a bank account or obtain a business credit card
- The EIN makes it possible for you to hire employees
- Using an EIN for your business protects your personal information and assets in many cases
What Types of Business Must Have an EIN?
Several types of businesses are required to fill out an EIN application. This includes any business that is a corporation or partnership, any that will file tax returns related to excise, tobacco, alcohol, firearms or employment and any business that withholds taxes on non-wage income paid to non-resident aliens. Other businesses that must have an EIN include those with a Keogh plan or certain organizations related to trusts, estates, non-profits, farmers’ cooperatives, plan administrators or real estate mortgage investments. Even if your business doesn’t need an EIN, it is a good idea to get one for privacy purposes.
How to Apply for Your EIN
You can begin the application for your EIN online at IRS-EIN-Tax-ID. The application asks a few questions about yourself and your business, including addresses and the type of business you run. Simply fill out the information and submit your application. Once completed, you can use a tracker to verify an EIN number once you receive it. Nearly every applicant will receive his or her federal tax ID number within a few business days. Some even receive it the next business day. To learn more about applying for a federal tax identification number for your company, contact IRS EIN Tax ID Filing Service.