If you’re starting or running a business, there’s one thing you need to know – obtaining a Employer Identification Number (EIN) is essential. Luckily, the process to obtain an EIN is fairly straightforward and can be done online in minutes. Here’s everything you need to know about obtaining a EIN number for your business:
What Is a EIN Number?
A EIN number is essentially like a Social Security number for businesses. It helps the IRS identify and keep track of businesses for tax purposes. Every business needs an EIN number in order to establish financial accounts, such as checking and savings accounts, loan accounts, credit card accounts and payment services.
Who Needs A EIN Number?
Any business that has employees will need to have an employer identification number. This includes corporations, partnerships, limited liability companies (LLCs), sole proprietorships, trusts and estates. Even if your business does not have any employees but instead operates solely with independent contractors, you still may need an EIN.
How Do I Get A EIN Number?
The best way to get a EIN number is by applying online through the Internal Revenue Service (IRS) website. You will have to provide basic information about your business including its legal name, state of formation and its purpose of existence. The IRS will also require other information such as your mailing address and type of ownership structure (sole proprietorship/partnership/corporation).
Once you submit all the necessary information online it should only take about 15 minutes for the IRS to generate your new employer identification number – just make sure all information provided is accurate!
Why Do I Need An EIN Number?
An important reason why obtaining a EIN number is essential for businesses is because it allows banks, lenders and other financial institutions to easily distinguish one company from another when reviewing applications for credit or loans etc.. Additionally, having an employer identification allows employers to more easily comply with federal employment tax reporting requirements. An employer identification also establishes credibility as it creates separation between personal taxes and those who are legally required by the IRS on behalf of their business operations.
In summary – if you are starting or running a business that has any employees on payroll or deals with any kind of contracting work then having an Employer Identification Number (EIN) is essential requirement in order to proceed with certain tasks such as opening bank accountsor using payment services! Make sure you apply for your very own employer identification ASAP!