Free Guide to Getting a Business Tax ID Number

What Is an EIN and Why Businesses Need One

An Employer Identification Number (EIN) is a unique nine-digit code issued by the Internal Revenue Service (IRS). Think of it as a Social Security number for your business. The IRS uses this number to identify your business for tax purposes, and most interactions with the federal government about your business will reference this number.

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The EIN format is XX-XXXXXXX (for example, 12-3456789). This number appears on tax returns, business licenses, bank accounts, and employment records. If you hire employees, you must have an EIN. If you operate as a sole proprietorship without employees, you might use your personal Social Security number instead, but many business owners choose to get an EIN anyway for privacy and organization purposes.

According to the IRS, there are approximately 33 million active EINs in the United States. This reflects the vast number of businesses, nonprofits, and other entities that need tax identification. The IRS issues roughly 2 million new EINs each year, showing that business formation remains steady across the country.

Different business structures have different EIN requirements. A corporation always needs an EIN. A partnership needs an EIN. A Limited Liability Company (LLC) typically needs an EIN if it has employees or operates as a corporation for tax purposes. A sole proprietor without employees may not need one but often gets one anyway. A nonprofit organization always needs an EIN to operate and receive tax-exempt status.

Banks typically require an EIN before opening a business bank account. Credit card processors need one before you can accept business payments. State licensing agencies often ask for an EIN when you register your business. Having this number early in your business journey makes many administrative processes smoother.

Practical Takeaway: Determine your business structure first (sole proprietorship, LLC, corporation, or partnership), as this determines whether you must have an EIN or whether getting one is optional but recommended.

How to Obtain Your EIN Online

The fastest and most direct way to get an EIN is through the IRS website. The IRS offers a free online application system called "Apply for an EIN Online" at irs.gov. This method takes about 15 minutes to complete and you receive your EIN immediately upon approval—often within minutes. This is why many business owners choose the online route.

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To use the online system, you need several pieces of information ready before you start. You'll need your legal business name and any trade names (doing business as, or DBA names) you plan to use. You'll need the primary business address and mailing address. If you're the owner, you'll need your name, address, and Social Security number or ITIN (Individual Taxpayer Identification Number). You'll need to describe your principal business activity—what your business actually does. You'll also need to indicate your business structure type.

The IRS online system asks you to select the reason you need an EIN. Options include opening a bank account, starting a new business, hiring employees, creating a trust or estate, changing your business structure, and several other reasons. This helps the IRS understand your situation, though your answer doesn't affect whether you receive an EIN.

One important rule: the person applying online must have a valid Taxpayer Identification Number (either a Social Security number or ITIN) and must be authorized to make decisions for the business. You cannot apply online if you don't have a U.S. address or if you represent a business owned by a non-U.S. resident without a Social Security number or ITIN—in those cases, you must use alternative methods.

The online system uses security questions and verification to confirm your identity. Common questions relate to previous addresses, credit history, or financial accounts. This protects against fraud. After successful verification, the system generates your EIN and displays it on the screen. You should write it down and save the confirmation page.

Practical Takeaway: Gather your business legal name, addresses, business description, and owner identification before going to irs.gov to apply online, so you can complete the process in one session without interruptions.

Alternative Methods to Get an EIN

While the online method is fastest, the IRS provides other ways to obtain an EIN if the online system isn't suitable for your situation. These alternatives exist because not all businesses fit the online system's requirements, and some business owners prefer different approaches.

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One alternative is telephone application. You can call the IRS Business and Specialty Tax Line at 1-800-829-4933. This line operates Monday through Friday, 7 a.m. to 10 p.m. Eastern Time. When you call, a representative will ask you the same questions as the online form. The call typically takes 5-10 minutes. However, you won't receive your EIN immediately during the call. Instead, the IRS mails it to you within two weeks. This method works well if you need help understanding questions or have circumstances that might not fit the online form perfectly.

You can also apply by mail using Form SS-4 (Application for Employer Identification Number). You can obtain this form from irs.gov or by calling 1-800-829-3676. Mail the completed form to the IRS address listed on the form instructions. Processing typically takes 4-6 weeks by mail. This method is useful if you don't have internet access or prefer written records, but it's significantly slower than other options.

For international applicants or those without U.S. addresses, the IRS has specific procedures. If you're a non-U.S. resident business owner, you must apply by mail or through an authorized representative in the United States. An authorized representative could be an accountant, lawyer, or business formation service. This representative completes the form on your behalf and signs it with a power of attorney document.

Some people use business formation companies or tax preparation services to handle EIN applications for them. These services typically charge $100-$500 to handle the paperwork. However, since the IRS process is free and relatively straightforward, many business owners do it themselves rather than pay for this service.

Practical Takeaway: If you have internet access and meet the basic requirements (U.S. address and valid Taxpayer Identification Number), apply online for the fastest result; otherwise, use the phone method for personal assistance or mail for a written record.

What Information You'll Need to Provide

The IRS requires specific information to issue an EIN, whether you apply online, by phone, or by mail. Having this information organized before you start saves time and reduces errors. Mistakes on your initial application can delay processing or require corrections later.

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Business information includes your legal business name (the name registered with your state), any trade names or "doing business as" names you operate under, your principal business address (where you physically work or operate), and a mailing address if different from your principal address. The principal address must be a physical location—a street address, not a post office box. If you operate from home, use your home address.

You need to describe your principal business activity in detail. Don't just write "retail" or "consulting." Instead, write "sell women's clothing online through e-commerce website" or "provide marketing strategy and implementation for small businesses." The IRS uses this information to categorize your business for statistical purposes. Be specific about what your business does. Vague descriptions sometimes cause processing delays.

Owner information includes the owner's name, address, and Taxpayer Identification Number (Social Security number for U.S. citizens, or ITIN for non-citizens). If your business is a partnership or corporation, you need this information for the principal owner or responsible party—typically the managing partner or CEO. Some business structures also require information about additional owners or board members.

Business structure information includes your business type: sole proprietorship, partnership, corporation, S corporation, LLC, nonprofit, trust, estate, or other entity type. Be accurate here, as this affects how the IRS processes your information and how your tax obligations are structured. If you're unsure about your structure, research this before applying or consult a business formation resource.

You should know the date you plan to start your business (or the date you actually started if you're applying after starting). You'll also indicate whether you have employees and, if so, how many. If you plan to hire employees soon, include that information.

Practical Takeaway: