EIN - How and When?
How to Apply for an EIN: A Guide for Business Owners
An Employer Identification Number (EIN) is a crucial identifier for businesses, similar to a Social Security number but for business entities. Whether you're launching a startup or restructuring an existing company, obtaining an EIN is an essential step. In this guide, we’ll cover when you need an EIN, how to apply, and what you’ll need to complete the application.
When Do You Need an EIN?
Not all businesses require an EIN, but you must apply for one if your business does any of the following:
Hires employees
Operates as a corporation or partnership
Files employment tax returns
Files alcohol, tobacco, or firearms tax returns
Withholds taxes on income, other than wages, paid to a non-resident employee
Even when it isn’t legally required, some business owners choose to obtain an EIN to more efficiently separate business and personal finances. Additionally, some banks require an EIN to open a business account.
How to Apply for an EIN
Applying for an EIN is free and can be done in several ways through the IRS. The easiest and fastest method is to apply using the online application on the IRS website. However, you can also submit an application via fax, which typically takes four business days to process, or it can be mailed to them, which can take up to four weeks to process. International applicants have the option to apply with a phone application by calling +1-267-941-1099, but this option is not available to U.S. residents.
Checklist: What You Need to Apply for an EIN
Before starting your application, have the following information ready:
Legal name of the business
Business entity type (e.g., sole proprietorship, LLC, corporation, partnership)
Responsible party's name and Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
Mailing address and physical location of the business
Reason for applying (e.g., hiring employees, starting a new business, banking purposes)
Principal industry and business activities
Number of employees expected within the next 12 months
Closing month of your business accounting year
Final Thoughts
Obtaining an EIN is a straightforward process that can help streamline your business operations and tax obligations. If you need assistance determining whether or not your business needs an EIN, or completing the application process, McMillan-McCalla Law is here to help. Contact us today to leverage our expert legal guidance!
