An EIN number, or Employer Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to business entities in the United States. It is used for tax filing, business reporting, and other official purposes to identify a business entity, similar to how a Social Security number identifies an individual. The EIN is formatted as XX-XXXXXXX and is also known as a Federal Tax Identification Number. Businesses need an EIN to:
- File business tax returns
- Hire employees
- Open business bank accounts
- Apply for business credit
- Identify the business in official documents
The EIN never expires and is unique to each business, never reassigned to another entity. It applies to various types of entities including corporations, partnerships, sole proprietorships, non-profits, and more. Applying for an EIN is free and can be done directly through the IRS. The EIN is not considered sensitive information like a Social Security number and is often shared publicly as needed for business purposes. In summary, the EIN is essential for conducting business legally in the U.S. and for tax administration purposes. It acts as the business's federal tax ID number. If you have a business or are starting one, obtaining an EIN is a crucial step. This provides a comprehensive explanation of what an EIN number is and why it is important for businesses.
