What is an EIN?

An EIN stands for Employer Identification Number, which is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify businesses, trusts, and other entities. It is also known as a Federal Tax Identification Number.

An EIN is required for a variety of purposes, including:

1. Filing tax returns: All businesses, including sole proprietorships, partnerships, LLCs, S Corporations, and C Corporations, are required to have an EIN to file federal tax returns.

2. Hiring employees: Businesses that hire employees must have an EIN to report wages and withhold taxes.

3. Opening a business bank account: Most banks require an EIN to open a business bank account.

4. Applying for business licenses and permits: Many states and localities require businesses to have an EIN to apply for licenses and permits.

5. Applying for business credit: Lenders and creditors may require an EIN to check a business's credit history and score.

You can apply for an EIN online through the IRS website or by mail, fax, or phone. It is important to have an EIN if you are starting a business or making changes to your business structure.