What is an Employer Identification Number (EIN)?

Modified on Thu, 12 Oct 2023 at 04:16 AM

For a variety of reasons, you might decide you’d rather own your investments inside of a corporate entity (like an LLC).


In the same way that individuals have taxpayer identification numbers, businesses do as well. This is called the Employer Identification Number (EIN).


An EIN is a unique 9-digit number issued by the IRS to persons or entities doing business in the United States for purposes of identification. It is also known as Federal Employer Identification Number or Federal Tax Identification Number.


Although an EIN is most often used to identify a company (such as an LLC) with the IRS, it’s also needed to open a business bank account, apply for business licenses and permits, do business with other companies, and handle payroll for employees (if applicable).


EIN Numbers are used for:


  • All correspondence with the IRS
  • Deposits and payments for federal taxes
  • Opening an LLC business bank account (checking, savings, or investment accounts)
  • Filing tax return and other documents (federal, state, and local)
  • Handling employee payroll (if applicable)
  • Obtaining business lines of credit or business loans
  • Obtaining credit cards in the name of the LLC
  • Applying for business licenses


If you have a foreign-owned LLC, you can get an EIN without an SSN or ITIN. You just can’t apply for your EIN online. Instead, you’ll need to mail or fax Form SS-4 to the IRS.


For more information on how to apply, please visit the IRS website at this link here.



Getting an ITIN can be helpful in the overall process of obtaining a business EIN since it will allow you to use the online IRS form to fill out the application for your business EIN.


You do not need to have an ITIN in order to get an EIN for your LLC. However, getting an ITIN may be helpful in the overall process of obtaining a business EIN; it will allow you to use the online IRS form to fill out the application for your business EIN.

 

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