Why Do I Need an EIN?
An EIN is a federal identification number issued by the IRS to identify a business entity. EINs are also known as a Federal Tax ID number. Legally, you are required to identify your business with one of two numbers: either your social security number or an employer identification number.
Generally you need an employer identification number when your business:
- Is new
- Hires, or will hire, employees
- Is an LLC or Corporation
- Opens a bank account
- Changes type of organization
If you are a sole proprietor, your social security number can be used on all of your government forms and other official documents, but most small business advisors recommend that you apply for an EIN for these official documents.
Furthermore, most banks require an employer identification number in order to open a business bank account. If you are ready, our business filing experts can help you get started with your paperwork.