What is an Employer Identification Number?
With small business basics, an “Employer Identification Number” is also called an EIN, Tax ID or Federal Tax ID. An EIN is essentially a Social Security Number for a business. So, if your business wants to open up a bank account, hire employees or file its taxes separately, it’s going to need an Employer Identification Number or a Tax ID number. You can get that by filing out a simple form SS4 with the IRS. There just has to be an individual who is responsible for taking care of the taxes and making sure everything’s done. You can usually get an EIN almost the same day if you file it.
An employer identification number (EIN) is a series of digits used to identify a business in the United States. Also called a federal tax identification number, it is granted to a business by the Internal Revenue Service. It can be used for a variety of purposes, with the most important one being the filing of tax returns. It is also used for opening business accounts and applying for business licensing. Not all businesses need an EIN. A business needs one if it has employees or is classified as a corporation or partnership. An EIN is also required if a business has to file an employment or excise tax return. Businesses that file alcohol, tobacco, and firearms tax returns need these numbers as well. An employer identification number is also required for a business that withholds taxes on income that is paid to non-resident aliens. This excludes regular wages, however. Businesses that have Keogh plans and involvement in certain trusts, IRAs, non-profits, farmers’ cooperatives, and real
