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An employer identification number (EIN) is like a Social Security number (SSN) for a business. It's assigned by the IRS and any business, including a sole proprietorship, is eligible to obtain an EIN. EINs aren't always necessary, and we'll walk you through when they're necessary and why EINs can be beneficial even when they're not.
What is an EIN and How Can I Get One?
An EIN serves as a unique identifier for your company and is largely used for tax purposes. Any registered business is required to have one, and it serves as the primary ID of a business to the government. It's also commonly referred to as a Tax Identification Number (TIN), 95 number or tax ID number. It is likely to be used for the following reasons:
- Business taxes
- Obtaining small-business financing
- Obtaining a business license
- Various business legal documents
Applying for an EIN is extremely easy and can be done within minutes. We recommend that businesses apply for an EIN as soon as possible, since it is so crucial for various purposes. You don't need an EIN if you are the only employee, but if you're looking to quickly scale your business, having an EIN early on is only beneficial. Your EIN is your business's tax ID, and you want filing your taxes to be as smooth as possible. It's unlikely that a business owner would use an EIN as frequently as something like a SSN so it's easy to forget. However, try to write it down somewhere easy to remember, as retrieving your EIN can be a bit of a process.
If you're an international applicant and don't have a legal residence in the U.S., you can apply by telephone, fax or mail. If you're calling, fill out a SS-4 form ahead of time to have your answers prepped for the questions the agent will ask. If you're filing via fax or mail, the SS-4 form will be the form you send in. These methods take much longer than applying online, and you can expect to have your EIN within a few weeks.
Does My Business Need an EIN?
Businesses of all types are welcome to apply for an EIN. However, there are certain businesses that legally require one. If you answer yes to any of the following, you'll need an EIN.
- Does your business have employees?
- Does your business file employment or excise taxes?
- Is your business taxed as a partnership or corporation?
- Does your business withhold taxes on nonwage income paid to a nonresident alien?
Even if your business is a sole proprietorship or LLC with no employees, we'd recommend obtaining an EIN to separate your personal and business taxes. If you don't have an EIN, you'll need to use your personal SSN for various tax documents and that just opens up the increased possibility for identity theft.
Only those with a SSN, an Individual Tax Identification Number, or an existing EIN may apply for an EIN.
Does My Business Need to Reapply for a New EIN?
Sometimes, your business may need to reapply for a new EIN. Rather than amending your business's existing EIN, you'll be required to submit an entirely new one. According to the IRS, here are the most common reasons:
- You change the structure of your business, like incorporating your sole proprietorship or turning your sole proprietorship into a partnership.
- Your purchase or inherit an existing business.
- You created a trust with funds from an estate.
- You are subject to a bankruptcy proceeding.
Looking for Your EIN?
Forget your EIN? No problem. Here are a few options on how to retrieve it.
Check Anywhere Your EIN Could be Recorded
Looking up your EIN or tax ID should be simple, since theoretically, it should be stamped all over your documents. First, check to see if you received an email or physical letter from the IRS confirming your EIN when you first applied. It will be in either your email or in a letter depending on how you applied.
Second, check your prior tax returns, loan applications, permits or any documents that your EIN would've been printed on. Assuming this isn't the first time that you've had to use your EIN, it should be on most official government forms that you've had to fill out in the past. If you can't find your documents, we strongly recommend better organizing them.
Performing a tax ID or EIN lookup is by no means complex and shouldn't require the services of a paid service.
Contact the IRS to Find Your EIN
If you really can't find your EIN on the previously mentioned documents, you can contact the IRS, but you'll need to call them between 7 a.m. and 7 p.m. local time.
If your EIN has changed recently, and it is likely that your EIN is different on older documents, this should be your first option. Be sure that the person contacting the IRS is authorized, someone like a sole proprietor, a partner in a partnership or a corporate officer.
Need to Look Up Someone Else's EIN?
There is the rare instance where you'll need to look up another company's EIN. For example, the nature of your business may require this, or you may want to look up another business's EIN to validate their information.
If the company is publicly traded and registered with the Securities and Exchange Commission (SEC), the SEC actually requires that the company's EIN be on all documents. You can use the SEC's EDGAR system to look up such a company's EIN for free.
If a company is not registered with the SEC and is privately held, it will be more difficult. Here are a few strategies you can use: