Are you starting a business and wonder if you need to get an EIN (Employment Identification Number)? Read on, my fellow entrepreneur, for all the information you need about how to get an EIN number, apply online, the cost, free options, exactly what an EIN is (and is not), its uses, purposes, and examples (number of digits and prefixes).
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What is an EIN Number?
Let’s start with the meaning of the abbreviation letters EIN, which stands for Employer Identification Number.
The definition is that an EIN or FEIN (Federal Employer Identification Number) is a company’s, or your business’s, registration number with the United States government agency, the IRS (Internal Revenue Service), to identify companies for taxation and regulatory purposes.
While its name (Employers Identification Number) implies that it is for employers only, it is not, its main purpose is to identify businesses for tax reporting purposes. An EIN number is to a business what a social security number (SSN) is to an individual- a unique number to enter onto your tax return forms.
EIN vs FEIN vs TIN – these are all abbreviations and names used to describe the same federal tax number for business registration. No wonder us business owners are confused with so many names for the same thing!
Format and Examples of EIN Numbers
EIN numbers are 9 digits in length. The format is as follows XX-XXXXXXX. Some EIN numbers have letter prefixes such as; A – Agricultural Employer, H – Household Employer, F – Federal Government, G – State or Local Government, N – Nonprofit Employer, S – Foreign subsidiary of US Employer, and W – Reporting Entity not subject to Social Security taxes.
The first two digit prefix indicates the geographic area of the company headquarters. However, since 2001, the IRS has centralized the EIN assignment process so not all new EIN numbers get prefixes. Thus Employer Identification Numbers issued after 2001 may not have state-specific prefixes.
How to Lookup an EIN Number for a Company?
To locate your employers EIN on your W2 form
If you want to look up an EIN FEIN for other companies go to the company website and if they are a publically traded company they will have an Investor Relations page with a link to the Filing documents. Securities and Exchange Commision filings have EIN numbers on the first page.
The online database SEC EDGAR is a free way to look up SEC filings online.
Do I need an EIN for my Business?
Yes, if you plan to hire any employees or are structured as a partnership or corporation, whether you operate as a DBA or not. Certain types of businesses such as trusts, nonprofit organizations, farmers cooperatives, estates and real estate investment entities must obtain an EIN.
How to Get an EIN or FEIN Number?
I recommend using our preferred small business legal resource Legalzoom to get your EIN Federal Tax ID. It is inexpensive – $79, fast and accurate. While you can also register yourself and get an EIN number at the IRS government website. I found it difficult and time-consuming so I opted to use the legal services of Legalzoom. Time is money and I choose to spend my time on activities that build my business – not paperwork.
Alternatively, you could fill out the IRS Form SS-4 and submit it by fax or mail.
If I have a DBA do I also need to get an EIN?
If you operate your business as a DBA (doing business as), sole proprietorship you may need to get an EIN for federal tax purposes. If your business hires employees, temporary or permanent, full or part-time you must obtain an EIN. Additionally, if your business tax return will show taxes withheld from income other than wages that were paid to non-resident aliens you too must also obtain an EIN. Also if your business structure is a partnership or corporation but is operating as a DBA you need to have an EIN.
What if my business is an LLC do I have to get an EIN?
Because the IRS does not recognize LLC Limited Liability Companies as separate entities for taxation purposes you don’t necessarily need an EIN number. The exception is when your LLC is structured as a partnership or corporation you must obtain an EIN. However, if your LLC is a sole proprietorship structure you do not need to have an EIN, but you will need an ID number if you hire employees.
Do Corporations require EIN?
Yes, both S corp and C corporations are required by the IRS to get an EIN or Federal Tax ID number, whether you plan to hire employees or not.
I don’t have any employees so why do I need to get an Employer Identification Number?
While the ID number is generally called an “Employer” ID number it is actually a tax registration number for the IRS. So even if you do not have employees you may be required to get an EIN Number.
How much does it cost to get an EIN?
For $79 at Legalzoom you can get an Employer ID Number in three easy steps. You can also apply for an EIN number at the IRS website, but I found it confusing and time-consuming.
How long does it take to get the EIN number?
If you have completed your application properly and completely you should get your EIN number certificate within 1-2 weeks.
Do I need an EIN to open a bank account?
Depends on your bank. However more and more commercial banks are requiring your EIN number before opening your business accounts. Bank of America requires new businesses to bring copies of the EIN certificate in order to open a business checking account.
I Lost and Forgot my EIN number – How can I find it?
Start by trying to find the original computer notice from the IRS that contains your number. You may have it filled with your checking account papers from when you presented your EIN to open the bank account. If you can’t find this letter, then contact your bank they probably have it recorded in your original account paperwork.
Still no luck, then search your past tax returns which most likely have it listed.
Finally, if you still cannot find your EIN number you can call the IRS EIN Business and Specialty Tax Line (800) 829-4933, 7 am – 7 pm who can lookup your EIN number.
Are EIN and TIN Tax ID numbers the same thing?
Yes, you know how the IRS likes to make everything nice and complicated this is no different. This ID number is called alternatively, EIN (Employer Identification Number), FEIN (Federal Employer Identification Number) and TIN (Taxpayer Identification Number). For more confusion, it used to be called the “95 number” also! All of these names refer to the nine-digit number assigned by the IRS to your business.
Are EIN numbers free?
You can get a free EIN number if you do the work yourself of obtaining the correct forms, completing them properly and then faxing or mailing to the IRS. There is also an online application system that requires the principal officer, general partner, grantor, owner, trustor to have a valid Taxpayer Identification Number (Social Security Number or Individual Taxpayer Identification Number) in order to use the online EIN application site. I recommend getting your EIN quickly and inexpensively at Legalzoom.
Are EIN numbers confidential or public record?
Can EIN numbers be transferred? How to Transfer EIN Numbers?
Can one EIN number be used for multiple businesses?
Do EIN numbers expire?
Do EIN numbers change every year?
I have an EIN now what is next step to start my business?
Should I use an EIN or SSN for my business?
Should I put my EIN on Divorce Papers?
Should I put my EIN on Invoices?
Can EIN numbers start with 0 zero?
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