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What Is An EIN?

An Employer Identification Number (EIN) is a unique nine-digit number assigned to businesses and other entities by the Internal Revenue Service (IRS) for tax purposes in the United States. It is also known as a Tax Identification Number.

You can think of an EIN like a Social Security Number for your business. An EIN is used to identify a business entity and is required for various tax-related purposes, such as filing tax returns, opening a bank account, and hiring employees. It is similar to a Social Security number for individuals, but is used for businesses and other entities.

Having an EIN is imperative for several reasons. Firstly, it helps the IRS identify your business for tax purposes. It’s required for any business that has employees or operates as a corporation or partnership. Secondly, it allows you to separate your personal and business finances, which is essential for maintaining accurate financial records and protecting your personal assets. Lastly, many vendors, clients, and financial institutions may require your EIN for various transactions, so having one streamlines business operations and builds credibility.

  • File taxes
  • Open a bank account
  • Hire employees
  • Apply for credit
  • Register for licenses and permits

Other entities like non-profits, trusts, and estates also need an EIN to file tax returns and comply with other regulations.

You’ll need an EIN when establishing a legal presence in the United States.

You can receive an EIN directly from the official IRS website at irs.gov.