Obtain an EIN: Quick and Easy

Most businesses need to obtain an Employer Identification Number (EIN). Also known as a Taxpayer Identification Number (TIN), EINs are issued by the Internal Revenue Service (IRS) and is like a social security number for your business. If you are established as any sort of legal entity, such as a corporation, limited liability company, non-profit, or partnership, most banks will require you to obtain an EIN before you can open a banking account in the name of your business. If you are a sole proprietorship, you can open a bank account, but it must be in your personal name using your personal social security number, with a DBA (doing business as) designation.

Regardless of your business entity choice, you cannot legally hire an employee until you have established an EIN. You will then need to use your EIN when reporting any employment-related information to the IRS.

Despite what you may think about the IRS, they have made the process to obtain an EIN quite easy. EIN numbers need to be obtained by an owner of the business. You do not need to hire an attorney to obtain an EIN, nor do you need to hire one of those "We Will Incorporate You" firms.

The quickest way to obtain a new EIN is to apply online at http://www.irs.gov/businesses/small. You will need to go through an automated questionnaire and submit it. Some of the information you will need to know includes what type of business entity you have chosen, what tax classification you want to choose, who are the owners and their social security numbers, what date you anticipate paying your first wages, etc. If you have any questions, review a printed SS-4 form before you begin the online process.

Immediately upon completing the online process, the IRS will do a quick verification of the information and your new EIN will be issued within minutes. If you do use a third-party to obtain the EIN for you, they will not get an immediate EIN. They can submit the form, but you will get a letter in the mail from the IRS with your number.

In regard to the letter from the IRS, here is a word of caution: the IRS will send a letter in approximately 10 days confirming your number. There have been instances where the online number and the confirming letter contained different numbers. The confirmation letter is the actual number assigned. If that discrepancy happens to you, make sure you notify every company where you have used the incorrect EIN (usually your bank, accountant, payroll processors) of the change. Otherwise, you will have to clear it up at tax time, which is the worst time to address those types of issues with the IRS.

If you don't want to apply online or if you are one of the rare entities which cannot used the automated service (some Indian tribes, foreign entities, etc. cannot apply online), you can also apply for your EIN via telephone by calling an IRS automated line at 1-800-829-4933 or mailing an SS-4 form directly to the IRS.

Your EIN is not in the IRS database until the confirmation letter is issued, so you should not file any taxes until that letter is received. If you need to file your taxes and you don't have your confirmed number yet, you should write "applied for EIN" on your tax return.

Your company's EIN is just like a social security number and can be used by thieves to wreck your financial security. Disclose your EIN with care.

Source: Internal Revenue Service regulations