EIN Numbers

When you're starting a business, one of the first things you’ll need is an EIN, or Employer Identification Number. Some new business owners don’t fully understand what an EIN is or why it matters. An EIN is a nine-digit number issued by the IRS that serves as a unique identifier for your business, similar to how a Social Security number identifies an individual. It’s also known as a Federal Tax Identification Number, and it plays a crucial role in how your business interacts with the government, banks, and other institutions.

An EIN is important for several reasons. First, it’s essential for tax reporting. You’ll use it on your federal tax returns, as well as any employment or payroll filings. Second, most banks require an EIN to open a business checking or savings account, so if you plan to keep your business finances separate, you’ll need one. Third, you can’t hire employees without it. An EIN is required to report wages and pay employment taxes. It’s also key to building business credit. Just like individuals build personal credit with their Social Security numbers, businesses use EINs to establish and grow credit, which becomes important when applying for loans, vendor accounts, or financing. Finally, an EIN is often needed to apply for state and local licenses, permits, or tax registrations.

Fortunately, getting an EIN is easy and free. The IRS allows you to apply online, by fax, by mail, or by phone if you’re located outside the U.S. The online application is the fastest method; your number is issued immediately. If you’re using Form SS-4 by mail or fax, it typically takes a few weeks. Some business owners hire an attorney or CPA to apply on their behalf.

Securing your EIN is a foundational part of launching and legitimizing your business. It’s a tool that protects your personal identity, supports compliance, and opens the door to banking, hiring, and growth opportunities. Whether you’re starting a side hustle or scaling a full-time operation, getting your EIN should be one of the first tasks you complete and one you manage carefully as your business evolves.

If you’re unsure whether your business needs an EIN or want to make sure it’s set up correctly from the start, The Center for Financial, Legal, and Tax Planning, P.C. can help you navigate the process and ensure compliance. Call us at (618) 997-3436 to get started.