Updated: Nov 21, 2022
An employer identification number (EIN) is a nine-digit number assigned by the IRS. It's used to identify the tax accounts of employers and certain types of organizations. Obtaining an Employer Identification Number, or EIN, is a key responsibility for many new businesses or businesses that are restructuring.
Applying for an EIN is a free service offered by the IRS. You can apply online, by fax, or by mail. Applying for an EIN is fairly simple. As long as you answer the questions truthfully about you and your business, you really can’t go wrong. With the click of a button, the system allows you to receive your employer identification number instantly by downloading the PDF attachment or you can choose to have the number mailed to you. If you choose to have the letter mailed to you, you will not be able to obtain the EIN until the letter arrives.
If you plan on opening a bank account in your business name an EIN will be needed. Once you have obtained your EIN, you will need to provide it to your bank so that they can set up a business account for your business. You will also need to use it when filing your taxes and when hiring employees amongst other things.
The IRS understands that there are a variety of business structures and that each one has its own unique tax needs. In order to ensure fair and equitable treatment for all taxpayers, the IRS issues only one EIN per responsible party per day.
This limitation is applicable to all types of businesses, including sole proprietorships, partnerships, corporations, LLCs, and non-profit organizations. It is important to note that an EIN is not required for every business; however, if your business does require an EIN, this limitation will ensure that you receive proper and fair treatment from the IRS.