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What is an EIN and do I need one?

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Getting ready to start a business? Here at the Duquesne SBDC, we work with businesses of all types, preparing them for the exciting time when they will open the door to their new business. One of the essential conversations we have with our clients is whether or not to obtain an employer identification number (EIN). This is a unique 9 digit number issued by the IRS that you will use when filing taxes for your business.

An EIN is an important starting point that will help you to register your business entity, obtain a business loan, open a business bank account, and more. An EIN is needed by any business that retains employees or by non-employers who operate as a corporation or a partnership. You will also need an EIN if you want to create a family trust, handle an estate, or hire an employee.

A sole proprietor without employees who do not file excise or pension tax returns does not need an EIN, but you still may want to have one because there are important advantages. An EIN is used instead of your social security number and helps you establish credit for your business. It also allows you to keep your social security number more private which can protect you from identity theft. An EIN can assist you in establishing credibility as an independent contractor, build trust with vendors, and make it easier and quicker to hire employees or get a business loan.

You will be filing for the EIN as the responsible party meaning that you have the authority to do business for the company completing the form. The IRS defines a responsible party as one who controls, manages, or directs the entity and the disposition of its funds and assets.

Getting an EIN is a quick and easy process so you should be wary of pop-up ads that require payment. You can call the Business and Specialty Tax line at (800) 829-4933 or apply online through the IRS.

If you need any assistance in filing for your EIN or other business planning, call upon us here at the SBDC. Our services are funded by the Small Business Administration, and we have a team of experienced consultants here to help you from the start all the way up to your grand opening!

The Duquesne University SBDC provides free business consulting for entrepreneurs in the Greater Pittsburgh Area. Click here to request free consulting or contact the SBDC for additional help and information. 

Cynthia "Cindi" Oliver has a diverse background with over 30 years' experience as a senior executive in both the public and private sector. She has served as CEO of several local nonprofits including the Girl Scouts, Mothers Against Drunk Driving, and most recently as Executive Director of the East Liberty Chamber of Commerce. In the private sector, Cynthia worked for 10 years owning and assisting in managing the family's real estate investment business where she specialized in buying, rehabbing, and marketing residential real estate. Cynthia currently owns and manages The Social Source Marketing, offering digital marketing services to small businesses. 
 
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Cindi Oliver
Business Consultant

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