Getting an EIN is important when it comes to your business. It enables you to file your taxes, open bank accounts, and even hire employees. Whether you’re starting a new company or expanding your business into the US market, knowing what EINs are is crucial.
In this article, we’ll cover what is an Employer Identification Number, who needs one, how to get it, and how long the process takes. If you’re planning to launch or grow your business in America, this is everything you need to know about EINs.
The EIN Explained
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business for tax purposes. It works like a Social Security Number (SSN) but for businesses, helping the IRS track business activities and tax obligations.
What Is an EIN Used For?
- Filing Business Taxes: Required for filing federal and state business tax returns.
- Opening a Business Bank Account: Most banks need an EIN to open an account for your business.
- Hiring Employees: Necessary for reporting payroll taxes to the IRS.
- Applying for Business Licenses: Often required for local or state permits and licenses.
Think of an EIN as your business’s ID card, it helps you handle taxes, pay employees, and open bank accounts with ease. Without it, running your business can get messy fast. Getting an EIN is a must if you’re serious about building a strong, legal business foundation.
Who Needs an EIN?
Not every business needs an EIN, but for many, it’s an important step to staying compliant and organized. If you plan to hire employees, open a business bank account, or file business taxes, you’ll need one. Even if you’re a solo entrepreneur, having an EIN can help separate your personal and business finances, making life a lot easier when tax season rolls around.
If any of the following applies to your business, then you will need an EIN:
- Hire Employees: It’s required to report payroll taxes to the IRS.
- Form a Corporation or Partnership: All corporations and partnerships must have an EIN.
- Operates as an LLC with Multiple Members: Multi-member LLCs need an EIN, even without employees.
- File Business Taxes: If you pay excise or employment taxes, you’ll need an EIN.
- Open a Business Bank Account: Most banks won’t open a business account without it.
- Apply for Business Licenses or Permits: Local and state agencies often ask for an EIN.
An EIN isn’t just for the “big guys,” it’s a smart move for anyone serious about their business. This will serve as your company’s unique fingerprint, giving you access to tools that help you grow and stay protected. So, if you’re building something meaningful, an EIN should be part of your foundation.
Steps to Getting an EIN
Getting an EIN is easier than you might think. The IRS offers several ways to apply, and the process is free. Whether you choose to apply online, by fax, or by mail, it’s all about providing the right information and choosing the method that works best for you.
Step 1: Gather Your Information
Before you apply, make sure you have the following completed:
- Business Name and Address: Use your official business name and mailing address.
- Responsible Party’s Name and SSN/ITIN: This is usually the business owner or a key officer.
- Business Structure: Know if you’re an LLC, corporation, or sole proprietorship.
- Reason for Applying: Such as starting a new business or hiring employees.
Step 2: Choose How to Apply
You can choose up to three options when it comes to applying for an EIN:
- Online (Fastest and Most Recommended)
- Apply through the IRS website—it’s quick and easy.
- Receive your EIN immediately after completing the form. (Only for US citizens or entities with a US address).
- Fax (Quick)
- Complete Form SS-4 and fax it to the IRS.
- Get your EIN within four business days via fax.
- Mail (Slowest)
- Fill out Form SS-4 and mail it to the IRS.
- Expect your EIN within four weeks.
Step 3: Save Your EIN Confirmation
After receiving your EIN, keep the confirmation letter safe! You’ll need it for everything, from opening bank accounts to filing taxes to name a few.
Applying for an EIN is one of the easiest steps you’ll take as a business owner, but it opens doors to so many opportunities. So, take a few minutes, get it done, and move one step closer to growing your dream.
How Long Does It Take?
The time it takes to get your EIN depends on how you apply. If you’re in a rush, there’s a quick way. If you don’t mind waiting, there are slower options. The good news? It’s free, and you’ll get your EIN no matter which method you choose.
Processing Times by Application Method
- Online (Fastest): Get your EIN immediately after submitting the form on the IRS website. (Best option if you have a US address).
- Fax (Quick): Receive your EIN within 4 business days after faxing Form SS-4.
- Mail (Slowest): Get your EIN in about 4 weeks if you apply by mail.
Pro Tip: Don’t wait until the last minute! You’ll need your EIN to open business bank accounts, file taxes, and handle payroll. The online method is your best bet for speed and convenience.
Understanding the Employer Identification Number (EIN) is key to setting up your business the right way. It’s more than just a number—it’s your pass to opening business bank accounts, paying employees, and filing taxes. Whether you’re a new business owner or expanding into the US market, getting your EIN is a step you can’t skip.
Ready to make your business official and manage your finances with ease? Sign up with Adro, where handling your US business needs becomes simple and stress-free. Start your journey with confidence, Adro has your back.
This article is intended for general informational purposes only and does not constitute professional advice. While we strive to provide accurate and up-to-date information, it may not apply to your specific circumstances. We recommend consulting with a qualified professional for personalized advice tailored to your unique situation.
