EIN (Employer Identification Number)
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What is an EIN?
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An Employer Identification Number, called EIN for short, is a nine-digit number that the IRS assigns in the format: XX-XXXXXXX. An EIN is used to identify the tax accounts of employers (and certain other businesses with no employees) and to pay federal employee withholding taxes.

If you will have employees, you need to obtain an EIN. If you are required to report employment taxes or give tax statements to employees, you need to obtain an EIN. In short, if you even remotely think you’ll have employees sometime in the future, you should likely obtain an EIN (because you’ll have to get an EIN once you do have employees). However, if you plan on operating as a sole proprietor or partnership without any employees, you don’t need an EIN to start your business. However, situations may arise in the future in which sole proprietors and partnerships would need an EIN even without employees (which we’ll discuss on the next page).

EINs are used by just about every type of business, organization and agency, including:
  • sole proprietorships
  • partnerships
  • limited liability companies (LLCs)
  • corporations
  • non-profit associations
  • trusts
  • estates of decedents
  • government agencies
  • certain individuals and other business entities
As you can see just about every type of business, agency, and organization uses an EIN. Therefore, it behooves you to obtain an EIN if you are starting a new business. While there are limited situations where an EIN is not required, it is generally better to err on the side of caution and obtain an EIN (plus the process to obtain an EIN is free, as we’ll discuss later).

Additionally, you should only obtain one (1) EIN for your business. If you have more than one EIN and are not sure which one to use, call the IRS’s Business and Specialty Tax Line at 1-800-829-4933 (TTY/TDD users can call 1-800-829-4059).

NOTE: Do NOT use an EIN in place of your social security number. EINs are for business purposes only!

Next, we’ll go over how EINs work for different types of business structures including sole proprietorships, partnerships, corporations, limited liability companies, and other forms.