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How do I get a Federal Tax Identification Number (E.I.N. Number)?

Updated on September 19, 2015

A Federal Employer Identification Number or E.I.N. is easy to get on-line

Who Needs an E.I.N.:

A Federal Tax Identification Number (Employer Identification Number or E.I.N.) is used to identify a business just like your social security number identifies you. Trusts, estates, pensions, corporations, partnerships and any business that hires employees are a few examples of entities that need an E.I.N.

Anyone who receives a 1099 for services performed is in business as at least a sole proprietor. Sole proprietorships, (basically you in business for yourself with no employees except for maybe your wife), can be identified by your social security number rather than an E.I.N. There are a few reasons a Sole proprietor may want an E.I.N. One important reason would be to maximize the amount you can save for retirement. You need an E.I.N. to open an individual or solo 401(k). Compared to a regular IRA, a sole proprietor can put away far more of their earnings into an individual 401(k).

How to Apply:

While you can complete a paper Form SS-4 and mail it in. You can also apply by telephone or fax. But, the easiest and fastest way to apply is on-line. It is free, easy, and you will have your E.I.N. ready for use at the end of the short process.

Applying On-Line:

Go to the link below to apply for free on-line.

To apply all you will need is:

1. The type of entity (sole propriertor, household employer, corporation, partnership, LLC, estate, trust, etc.).

2. The reason you are applying for the E.I.N. For a sole proprietor the reasons include:

a. Started a new business.

b. Hired employee(s).

c. Banking purposes such as the individual 401(k).

d. Changed type of organization.

e. Purchased an active business.

3. Your name, address, phone number and social security number.

4. The trade name or doing business as name, the county and state where the sole proprietor is located, and the start date for the sole proprietorship.

Just follow the directions and before you know it you'll have your E.I.N.

A couple of things you should be aware of even after you have your Federal E.I.N. First, even though you have your number, it will not be in the IRS electronic system for 2 weeks after you apply. Second, this is a federal E.I.N. Your state may require a separate state E.I.N. Remember to check your individual state's requirements.

Disclaimer: Any federal tax or tax planning information provided above or linked to this article is not meant to be specific to any particular individual or situation. Anyone who wishes to apply this information should first discuss it with their lawyer, accountant, or tax professional to determine its appropriateness or how it specifically applies to their unique situation.

© 2012 bankscottage

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    • MeanGreen profile image

      MeanGreen 5 years ago

      Great information. I have set up 2 EIN's for my businesses and I think this has great information to get it done with less time spent searching through the "paper-shuffle" of what to file where and at one time.

      On a somewhat related note:

      I recently met with a tax accountant to go over my business year-end taxes, and it was a very humbling experience.

      He taught us so much in just about an hour and we now have him handling a lot of the quarterly preparation and filing work that was easy for us to miss or forget, but is second nature to him. I generally like to try to tackle everything on my own, but if you really want to run a more efficient business you need to hire a good tax-services company. I wish we had consulted him right when we started the business, but I think that we appreciate him more since we did not!

    • bankscottage profile image
      Author

      bankscottage 5 years ago from Pennsylvania

      I agree. There are a lot of hubs and questions on here regarding tax preparation;, do it yourself or hire a tax professional. You have found out that for some simple situations it is pretty easy to do it yourself. But, as it gets more complicated, it is often better to hire a pro to take you through the maze more easily. Today, life is complex.

    • MeanGreen profile image

      MeanGreen 5 years ago

      too complex... but at least it's interesting!

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