The term EIN may have come up if you are a business owner, independent contractor, or self-employed person in the United States. But what does it actually mean? The Internal Revenue Service (IRS) issues an EIN, or employer identification number, which is a special nine-digit identifier used to identify businesses and other entities for tax purposes.
Similar to a person’s Social Security Number (SSN), an EIN is often referred to as a Federal Tax Identification Number (TIN). An EIN is used to identify a business entity, whereas an SSN is used to identify an individual for tax and other purposes. A business bank account must be opened before applying for business licenses and permits, filing tax returns, recruiting staff, and hiring employees.
So, how do you discover a company’s EIN? Checking any official documents, including tax returns, business registration paperwork, or other legal documents, is one method. These documents typically include the EIN. Another option is to use the online EIN Assistant tool provided by the IRS, which enables you to search for or apply for a new EIN. To get an EIN over the phone, call the IRS Business and Specialty Tax Line at 800-829-4933.
It is significant to remember that not all companies require an EIN. A sole proprietor’s Social Security number can be used as their tax identification number if they don’t have any workers and don’t submit any special tax returns. However, you must apply for an EIN if you are a sole proprietor who hires staff members or files certain tax returns.
Businesses may also have a State Employer Identification Number (SEIN), which is given out by the state in where the business is located, in addition to the EIN. While the EIN is used for federal tax purposes, the SEIN is used for state taxes.
The EIN is a special nine-digit code that the IRS assigns to distinguish businesses and other entities for tax reasons. By consulting official records, using the IRS’s online EIN Assistant tool, or phoning the IRS Business and Specialty Tax Line, you can discover a company’s EIN. Although not all businesses need one, having an EIN is necessary for many processes, such as recruiting staff, filing taxes, and requesting company licenses and permits.