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When starting to get your new business off the ground, you must take a few critical steps to ensure you follow the law. You must file taxes on your company’s losses, profits, and more as a business owner. Start applying for a business EIN to get your tax planning in order.
The Internal Revenue Service (IRS) uses EINs to identify businesses when they file your regular tax returns. Also known as an employer identification number, this number plays a pretty important role.
It doesn’t matter if you run a small business or a larger corporation; most entities need to have this number to do necessary tasks like opening a business bank account, applying for required licenses, reporting their taxes, and more. The IRS’ job is to help people meet their tax responsibilities and enforce tax laws.
If you’re applying for a new EIN, the IRS has a helpful guide for going through the application process. A quick and easy way to get started is with the online EIN application. This article will take you through other details of applying for a business EIN, like working through the requirements to apply, expanding your business by hiring employees, and improving your business for tax season.
The IRS uses an employer identification number (EIN) to identify your business for tax purposes.
New businesses interested in EIN obtainment can apply for an EIN easily on the IRS website.
Having an EIN can help you expand and improve your business. Check that you’re eligible first before applying.
An EIN lets you navigate taxes, manage payroll, and set up your business bank account, all while protecting your identity.
Like an individual social security number (SSN), an employer identification number (EIN) is a unique nine-digit number assigned to a business entity. It’s also known as a Federal Tax Identification Number, and the Internal Revenue Service (IRS) uses it to identify businesses when they file their tax returns. In most cases, business entities need an EIN.
Having an EIN helps businesses carry out essential tasks, like opening a business bank account, applying for business licenses, and filing tax returns.  The IRS is the federal body that collects taxes and enforces tax laws in the U.S. Its job is to ensure that businesses pay their taxes correctly and on time.
While most business entities need an EIN, not all do. While it differs for business types, typically, operating as a corporation, partnership, or nonprofit, all require an EIN.  You should apply for one early on to get the licenses you need to operate.  It can also protect your privacy as an individual since it saves you from having to use your personal SSN for business purposes.
As mentioned earlier, an EIN is critical to your business for several reasons. Most importantly, following federal law for tax purposes is vital. The IRS will use your EIN to identify your business entity when filing business taxes.
It’s helpful for new businesses to apply for an EIN early on to avoid trouble when filing tax returns. It helps separate personal and business finances by being able to file them individually. This way, you can divide your personal assets when receiving an income tax return.
Getting an EIN is vital in growing your business because it allows you to hire employees. New businesses need a specific tax ID number to report employment taxes and give tax statements to employees or annuitants. In addition, it is also included on forms given to employees, forms returned to business owners, and forms sent to the IRS and the Social Security Administration. 
An EIN identifies the business when withholding, depositing, reporting, paying, and correcting employment taxes. The IRS has a guide to help explain the requirements and how to handle each employee’s taxes each tax season. For more information or more complex topics, check out the IRS’ supplemental tax guide for employers.
Having another bank account solely for business-related expenses can help keep your personal and business finances separate, which can be especially helpful for small businesses. And you guessed it: To open a business bank account, you will need an EIN. Business owners should open a separate bank account when they start accepting and spending money as a business. 
There are several benefits to having a business bank account . Perks can include:
Purchasing power: Opening a separate line of credit via a business credit card can help you expand your business. It enables you to make big purchases early on, be prepared for future purchases, and establish a new credit history.
Protection: Separating business funds from personal funds helps you stay organized and offers limited personal liability protection. Business banking and merchant services also help protect customers by keeping their personal data secure and private.
Professionalism: An official business bank account adds a layer of professionalism by helping establish your entity. Customers can make payments directly to the business instead of an individual. In addition, finances and transactions will go to a separate account rather than taking the risk of mixing personal and business expenses.
While most new business owners need to apply for an EIN, not all do. A self-employed sole proprietor without employees who does not file any excise or pension plan tax returns does not need an EIN. However, they can still apply for one to keep things separate. In this case, the sole proprietor can use their personal SSN – rather than an EIN – as their tax identification number when filing taxes. 
According to the IRS, business formations that require an EIN are:
Businesses with employees
Businesses that operate as a corporation or partnership
Businesses that file the following tax returns: Employment, Excise, or Alcohol, Tobacco, and Firearms
Businesses that withhold taxes on income – other than wages – paid to a non-resident alien
Businesses with a Keogh Plan 
In addition, businesses involved with any of the following organizations will need an EIN:
Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
Real estate mortgage investment conduits
Plan administrators 
Essentially, most organizations need an EIN. Just because your business has a number that the IRS can use to identify it for tax purposes, it doesn’t necessarily mean it needs to pay taxes. Some types of entities are tax-exempt, like churches, church-controlled organizations, or other nonprofit organizations. Note that an EIN is not the same as a tax-exempt number. 
Check your eligibility requirements.
Designate a responsible party.
Submit the necessary documents.
Apply online through the IRS.
Before applying for an EIN, ensure you are eligible for one. Even tax-exempt organizations, like churches and nonprofits, need an EIN if they have employees or file any excise or pension plan tax returns.
Requirements for applying for an EIN include :
The principal business is located in the United States or U.S. territories
International applicants are allowed to apply for an EIN 
The person using has a valid taxpayer identification number, like an SSN or ITIN 
This may exclude non-resident aliens if they do not have an SSN
Limiting to one EIN per responsible party per day
A responsible party is the person who ultimately owns the entity. This can be in the form of controlling the business and related decisions, managing the business, or directing the applicant entity and the disposition of its funds and assets. 
This must be a person unless the applicant is a government entity. EIN applications must include the responsible party’s legal name and taxpayer identification. The IRS will recognize a true principal officer, general partner, grantor, owner, or trustor.  Only one responsible party can apply daily when applying for a new EIN. 
If you plan to designate a third party as your business’ responsible party, you must note this in the application form SS-4. There is a separate section at the bottom of the form titled “Third Party Designee.” The taxpayer must sign the form to be authorized legally and correctly. 
For most business owners applying for an EIN, you must fill out and submit Form SS-4 with the IRS. As mentioned throughout this article, applicants must provide the required information like a legal name, tax identification number, and responsible party when applying for an EIN. International applicants or non-resident aliens may need additional documentation in their applications.
Different business entity types may require a different set of forms. See below for what form your business structure needs for EIN obtainment:
• Business structure
• EIN application form
• Limited Liability Company
• S Corporation
• C Corporation
• Sole proprietorship
• Depends (see below)
The only exception where an entity type does not use the SS-4 form is a sole proprietorship. A sole proprietor without employees who does not file any excise or pension plan tax returns does not need an EIN. While they can still apply for an EIN, the sole proprietor usually uses their personal SSN – rather than an EIN – as their tax identification number when filing taxes. 
While multiple ways exist to file an EIN application, online is the easiest and fastest way. The Online EIN application is the IRS’ preferred method for business owners to apply and get their EIN. Rather than waiting several business days, the information gets transferred once the application is complete and an EIN is issued immediately. 
Small businesses can head to the IRS.gov site to find other application methods. If approved via fax, the IRS will send a fax back with the EIN within four business days. Mailing an application will take even longer to warrant a response within four weeks.  For the fax number or addresses of where to submit your faxes or mailed application, see “Where to File Your Taxes for Form SS-4.”
Applying for a new EIN comes with several critical steps and requirements. If done incorrectly, your application might get rejected by the IRS, which delays or even prevents your business from getting off the ground. For as low as $79, Swyft Filings can help you get your EIN. Our automated EIN filing process is seamless with professional expertise at the foundation, so you stay compliant.
The online application is quick, easy, and reliable from start to finish. Business owners can save money and time by avoiding mistakes and, more importantly, preventing potential drawn-out communication with the IRS. Our customer service takes you through the process with quick turnaround times so entrepreneurs can focus on what they do best.
Elevate Business Finances: Open a business bank account, file your taxes, and hire employees
Stay Private: Protect your social security number
Avoid Mistakes: Ensure your EIN application is prepared and filed correctly with the IRS
An EIN is a type of tax ID number (TIN). Other TINs include an SSN, ITIN, ATIN, and PTIN. 
Most business formations need an EIN, mainly corporations, LLCs, partnerships, and nonprofits. 
If you’ve lost or misplaced your EIN, you can take different steps to find it. The number will appear on the computer-generated notice issued by the IRS that came with your EIN application, your business bank account application, any application for a state or local license, or previous tax returns. You can also call the IRS and ask them to look it up. 
Typically, businesses only need to change their EIN when their ownership or business structure changes. You do not need to change your EIN number if the name of your business changes, but there is another set of requirements you should follow in that case. 
Yes, but only one responsible party can apply for a new EIN daily. This instance may be relevant for entrepreneurs with multiple business ventures. 
You can use your EIN to open a business bank account. This lets you apply for a credit card for business-related expenses. 
1. Internal Revenue Service. “Employer ID Numbers.” Accessed 10 April 2023.
2. U.S. Small Business Administration. “What is an EIN and Why is it Important?” Accessed 10 April 2023.
3. Internal Revenue Service. “Do You Need an EIN?” Accessed 10 April 2023.
4. Internal Revenue Service. “Taxpayer Identification Numbers (TIN).” Accessed 10 April 2023.
5. Internal Revenue Service. “Publication 15: (Circular E), Employer’s Tax Guide.” Accessed 10 April 2023.
6. U.S. Small Business Administration. “Open a Business Bank Account.” Accessed 10 April 2023.
7. Internal Revenue Service. “Frequently Asked Questions.” Accessed 10 April 2023.
8. Internal Revenue Service. “Employer Identification Number.” Accessed 10 April 2023.
9. Internal Revenue Service. “Apply for an Employer Identification Number (EIN) Online.” Accessed 10 April 2023.
10. Internal Revenue Service. “How to Apply for an EIN.” Accessed 10 April 2023.
11. Internal Revenue Service. “Responsible Parties and Nominees.” Accessed 10 April 2023.
12. Internal Revenue Service. “Lost or Misplaced your EIN?” Accessed 10 April 2023.
13. Internal Revenue Service. “Do You Need a New EIN?” Accessed 10 April 2023.
No matter the business type, Swyft Filings can help you form your new company.