One of the first things that your company will need to do after incorporation is acquire its federal tax identification number (also known as an Employer Identification Number and abbreviated “EIN”). The primary purpose of having an EIN is so that the IRS may easily identify your company, just as your social security number identifies you. This acts to streamline certain IRS imposed tax-related payments.

Do you need an EIN?

The quick version to this answer is: yes, almost certainly.

Your company will need an EIN in order to open financial accounts. Many invoicing processes utilize an EIN in order to keep company records organized, which means that you will need an EIN in order to pay your bills or to collect on debts. Hiring employees usually requires that you have an established EIN. And of course, taxed businesses must be identified by an EIN, in order to be in compliance with the law.

Please note that sole proprietorships and general partnerships must obtain a brand new EIN when taking on a new corporate structure. If you reform as an LLC or corporation, you’ll need to go through the process again.

State-level requirements

While the EIN is primarily only used by the IRS for federal tax-related reporting purposes, some states also require that all businesses file for a state-level tax identification number as well.  

The process

In order to obtain an EIN, you will need to prepare Form SS-4 with the IRS on behalf of your business. This form must then be properly submitted to the appropriate agencies.

Individual Tax ID Numbers (ITIN)

If you do not have a personal social security number, you will need to obtain an Individual Tax Identification Number (ITIN) in order to obtain an EIN for your business. This process requires the filing of Form W-7 with the IRS.

Swyft can help!

Our EIN acquisition service can ensure that you have this number as soon as possible after incorporation and with minimal effort on your part. We can walk you through the necessary steps, and then connect you with our EIN service. Our EIN service can complete and file all documents required to complete this process for your company. Contact us today!