What Is an Employer Identification Number EIN? Definition and Guide 2023

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Use of our products and services are governed by ourTerms of Use andPrivacy Policy. Even if your LLC didn’t do any business last year, you may still have to file a federal tax return. The statements and opinions are the expression of the author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law. A business credit card is a great way to start building your business credit and acquire larger and more lines of credit down the road.

Benefits of Having an EIN

The application is free and you can receive your EIN immediately. Withholds taxes for non-wage income paid to a nonresident alien. An Employer Identification Number is a unique nine-digit number assigned to U.S. We can provide a formal request letter and W9 form to you if you would like. We would also be happy to record your information over the phone.

A what is an ein number identification number is a number used by the IRS as a tracking number for tax purposes and is required information on all tax returns. EINs allow the IRS to easily identify businesses for tax reporting purposes. This limitation is applicable to all requests for EINs whether online or by fax or mail. You may apply for an EIN in various ways, and now you may apply online. This is a free service offered by the Internal Revenue Service and you can get your EIN immediately. You must check with your state to make sure you need a state number or charter.

Tax-exempt, charitable, non-profit organizations, and EINs

Which legal business structure makes the most sense for you often depends on your future plans for your company. All of this must be done before they start the application, but once they’re approved, the IRS can disclose your EIN to them.

You will need to https://www.bookstime.com/ and get approval for the business’s name from your state before getting an EIN. Maintaining the corporate veil also establishes credibility and professionalism by allowing your business to have its own identity separate from its owners. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. The person responsible for the business, regardless of their title within the company, must be an individual and not an entity.

Automate tax compliance worldwide

Employers need an EIN for an LLC to set up payroll, and the IRS will use the business’s EIN to track payroll taxes for taxpayers. Single-member LLCs are required to have an EIN if they have employees. The EIN is not considered to be sensitive information the same way a Social Security number is and is freely distributed by businesses online and in print publications. This means even those with only one employee are just as eligible for an EIN as multinational corporations. Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

A FEIN also allows you to enroll in the Electronic Federal Tax Payment System , letting you easily make tax payments over the phone or online. An EIN is the standard tax ID for businesses located in the U.S. with employees and/or more than one owner who meet the additional criteria listed above. A FEIN also allows you to enroll in the electronic federal tax payment system, where you can easily make tax payments over the phone or online. File your taxes.If you are required to have an EIN and don’t have it before you file your taxes, you open yourself up to all kinds of tax penalties. The IRS will ask for your business formation date and legal business name.

Employee Identification Number vs. Taxpayer Identification Number (TIN)

However, you can look at your EIN confirmation letter or other places your number may be recorded, including previously filed tax returns or old financing documents. Once the IRS has issued your EIN, you can use it to open a business bank account.