It may seem like the last thing you want to do when you’re forming a new company - yet another number to apply for and have to keep safely stored away somewhere.
But in reality, an EIN is both important for your business and easy to get. So no big deal! Here’s what you need to know:
What’s an EIN?
An “employer identification number” or “EIN” is one of several types of taxpayer identification numbers (“TIN”) issued by the Internal Revenue Service. (Social security numbers are another type of TIN.)
An EIN is a nine-digit number that IRS assigns in the following format: XX-XXXXXXX. The IRS uses EINs to administer tax laws, and many other groups such as banks, landlords, and state agencies require companies using their service to provide an EIN.
In short, think of an EIN like a social security number - but for a company.
Do I Need an EIN for My Business?
Very likely yes.
The IRS requires a company to have an EIN for a number of reasons, including if it has any employees, is taxed as a corporation or partnership, is required to withhold taxes on income, and a number of other reasons. You can see the IRS’s handy guide on this topic here
Some companies - usually sole proprietorships and LLCs with only one member (owner), do not strictly need an EIN, at least as far as the IRS is concerned.
But here’s the thing: if you have a new business, you should probably get an EIN no matter what, for two reasons: (1) many third parties - like banks, landlords and insurance companies - will require you to have an EIN if you want to do business with them, like opening a bank account, signing a lease, or getting business insurance, and (2) it’s fast and FREE.
Have we convinced you? Then you’re probably wondering:
What’s the Easiest Way to Get an EIN?
Hands down, Startomatic’s EIN Application Starter Tool is the easiest way to get an EIN
. Along with a complete suite of other tools and guides for business founders, it’s included in Startomatic’s comprehensive $99 per month subscription.
Some other guys (hint: one of them rhymes with BreagleGroom) can charge up to $297 just to get an EIN for you! Whatever you do, don’t pay extra for an EIN - the IRS issues them for free.
If you want to learn more about Startomatic’s complete set of tools for getting your company legally formed, building a brand, creating a web presence, and much more, check us out at startomatic.com.