It Might Be Important For Your Business To Have An EIN. Learn Why.
One of the first things you’ll want to do if you’re starting a business is to get an Employer Identification Number, or EIN.
This 9-digit number is used to identify your business for tax purposes and can even help protect you from identity theft because it can be used when dealing with vendors or clients and you won’t have to use your personal Social Security number.
An EIN for a business is similar to a Social Security number for an individual in that it is used on income tax and employment tax returns. It’s also likely to be required or to come in handy when opening a business bank account, applying for a loan or getting other business licenses.
In general, if you plan to have employees or operate as a partnership or corporation, you’ll need an EIN, which is also called a Federal Tax Identification Number. This can be done for free online through the IRS.
By going to IRS.govand searching for ‘EIN’ you’ll be able to learn about EINs and get your number. There are also ways to apply via mail or fax. While you’ll be able to get an EIN immediately by applying online, a mail application can take up to several weeks.
Having an EIN can also help establish your business credit history, and a solid credit history can improve your business credit score and might even qualify you for better loan rates or terms from potential suppliers.
If you are unsure about whether or not you need an EIN and what other types of licenses and permits your business might need, you should consider talking to a trusted business advisor or an attorney to make sure you are covering all your bases. You’ll also want to determine whether or not you need a State Employer Identification Number as well.
Take the time to learn more about EINs, why they are necessary and how they can help your business.