You may require an Employer Identification Number (EIN) if you are starting a business or organization and wish to open a bank account. For tax and identification purposes, the IRS issues a special nine-digit number called an EIN to corporations, nonprofit organizations, and other legal entities. However, a lot of people ponder whether they can obtain an EIN only for banking needs, without launching a company or incorporating.
An EIN is typically not needed to create a bank account at the majority of banks. Typically, you can use your Social Security Number (SSN) as your tax identification number to open a personal or commercial bank account. However, if you are opening a business account, certain banks might require an EIN, especially if you currently have workers or want to in the future. Additionally, some banks may request an EIN as an additional form of identification if you are a non-US citizen. Who Needs a Tax Identification Number (EIN)? Businesses, partnerships, nonprofit organizations, estates, trusts, farmers’ cooperatives, and plan administrators are among the groups that must get an EIN. You might not require an EIN if you are a lone proprietor with no workers. You can open a personal bank account and utilize your SSN as your tax identification number. However, you must obtain an EIN if you currently have employees or intend to do so in the future.
For taxation reasons, a Single Member Limited Liability Company (LLC) is treated as a disregarded company. With the owner’s SSN serving as the tax identification number, a Single Member LLC should complete Form SS-4 (Application for Employer Identification Number) as a solo proprietor. The “Name of the entity” column shouldn’t be filled in by the LLC. Instead, the “Name of the entity” section should be filled up with the owner’s name.
Generally speaking, you cannot substitute your EIN for your SSN when identifying yourself personally. Only organizations and businesses are permitted to utilize your EIN. However, if you are a non-US resident or a foreign organization conducting business in the US, some banks and financial institutions may permit you to use your EIN for banking purposes rather than your SSN.
In conclusion, unless you are a business entity with workers or plan to hire them in the future, having an EIN for banking purposes exclusively is typically not required. You can open a personal or business account at the majority of banks using your SSN as your tax identification number. However, you might need to obtain an EIN as an additional form of identification if you are a non-US resident or a foreign corporation conducting business in the US.
You must give your bank your EIN number, which you may get by requesting one through the IRS, in order to establish up an EIN with your bank account for banking-related purposes only. An EIN application can be made online, via phone, fax, mail, or in person. Once you have it, you can give it to your bank so they can connect your account to it. This will assist you in keeping your personal and corporate finances separate and be helpful when it comes time to file your taxes.
The terms “Tax ID Number” and “Employer Identification Number” are interchangeable. The EIN, also known as a Tax ID Number, is a special nine-digit number granted by the IRS to identify a corporate organization for tax reasons.