What is an Employer Identification Number (EIN)?
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.
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.
Do You Need an EIN for a Sole Proprietorship?
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 or a sole proprietor, build trust with vendors, and make it easier and quicker to hire employees or get a business loan.
Do You Need an EIN for Your LLC?
As an LLC, you are required to get an EIN to file taxes with the Internal Revenue Service (IRS).
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.
How Long Does It Take to Get an EIN?
The online application is the quickest way to get your EIN. You can get your EIN within a couple of minutes with the online application. There are several websites that would charge you for an EIN application. But Getting an EIN is a quick and easy process.
Go directly to IRS's website
and begin your application.
If you need any assistance in filing for your EIN or other business planning, call us here at the SBDC. Our services are no-cost and 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.