Frequently Asked Questions
What is an Employer Identification Number (EIN) and why is it important for businesses?
An Employer Identification Number (EIN), also known as a Federal Employer Identification Number (FEIN), is a unique nine-digit number assigned by the Internal Revenue Service (IRS) for tax purposes. This number is crucial for businesses as it serves as an identifier for companies operating within the United States. It is used to track tax returns and is necessary for opening bank accounts in the name of the business. The EIN is to a business what a social security number is to an individual. Not all businesses are required to obtain an EIN. Business structures such as partnerships, LLCs, corporations, or sole proprietorships that hire employees will need to file for an EIN. However, LLCs and sole proprietorships without employees will not need to file for an EIN; in these cases, the owner's social security number will be used instead. Obtaining an EIN is a straightforward process. You can file for an EIN online, which takes only a few minutes, and the number becomes available immediately. Alternatively, you can mail an SS-4 form or call the IRS.
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