Make no mistake about it - starting a business can be a great deal of fun. The challenge of it all, combined with the energetic enthusiasm you have for creating a new empire can be a joyful experience.
There are certain aspects involved, however, that can temporarily bring that ‘joyful experience’ crashing down to earth with a bang. Chief among them is the relentless shuffling, signing, and organizing, of paperwork.
Linked to a lot of paperwork both at the start of your business journey and also in the future is your EIN.
This is something you are going to have to dig out on many occasions when completing paperwork and filling out forms and is something that business owners commonly misplace, or forget.
So, this article is all about doing just that - where to look for your EIN and how to pull it up, when you need it. We will also quickly go over a few key points such as what exactly the EIN actually is, how it works, and what it does.
What Is Employer Identification Number (EIN)
An EIN is a nine-digit number similar to a social security number (SSN) that identifies your company in IRS records. Think of it like a national ID number that you can use at some places to prove your business identity.
After getting EIN, your startup can pay state and federal taxes. An EIN makes you eligible to open a business bank account, access the IRS, pay your business tax, get a business license, apply for business financing, or check your business credit report.
Where to Check for EIN
You can check for the EIN online (public companies should check SEC's website, while all non-public companies can check it at IRS) or get a hard copy document like EIN Verification Letter (147C) by calling IRS at 1-800-829-4933 and they'll send it via mail.
There are instances when you’re going through a business application or a document that requires your EIN number, but you can’t seem to recall it. Here are 8 ways you can use to locate it:
Your EIN Confirmation Letter
The first place to check your EIN is to locate it on the confirmation letter you got from the IRS. They might mention it as a federal tax identification number which is the same as EIN.
Older Tax Returns
If you have ever submitted business tax returns before, you can download or view their copy on the IRS portal. On the top right corner, you’ll find the employer identification number.
Business Licenses and Permits
Your business license, permits, or other relevant applications contain your employer identification number. These documents are necessary for your company to start a business or work with other companies.
Business Account Statement
Since EIN is necessary for a business bank account, every bank statement will reflect a federal tax ID.
Business Loan Application
If you have ever asked for a business loan from any institute, you can find the EIN on the form you filled out.
Business Credit Report
If you can’t find the EIN from any of the above sources, contact the credit bureau and get your business credit report. The EFX ID mentioned on the credit report is your EIN.
If you have received forms from independent contractors or shared forms as an independent contractor, the TIN mentioned in those forms is the EIN.
Ask the IRS to search for your EIN by calling the Business & Specialty Tax Line at 800-829-4933. The hours of operation are 7:00 a.m. - 7:00 p.m. local time, Monday through Friday.
An assistor will ask you for identifying information and provide the number to you over the telephone, as long as you are a person who is authorized to receive it.
Examples of an authorized person include, but are not limited to, a sole proprietor, a partner in a partnership, a corporate officer, a trustee of a trust, or an executor of an estate (source: IRS).
When Will You Need an EIN
An EIN (also known as a business's tax id number) is required for nearly every type of business organization, including LLCs, partnerships, sole proprietorships, nonprofits, corporations, trusts, and estates.
If your business has employees, you purchase a business, or file for bankruptcy; you’ll need a business tax ID number. A corporation or an entity taxed as a corporation or multi-member LLC requires an EIN to start or continue its operations.
Furthermore, vendors, credit card companies, and banks also require your EIN to conduct transactions.
How to Apply for an EIN as a Startup
There are four ways to apply for an EIN, but the most convenient option is to apply online. However, the online tool has no option to save the progress, so you must fill it in one session.
Also, if you leave the online form unattended for 15 minutes, the system will expire the session, and you will have to start again.
You can also apply using a Fax by downloading and filling out Form SS-4 and sending it to the official IRS fax number.
If you are applying for EIN internationally, you might need to call the IRS, and a representative will help you fill out the form on the phone and email you the soft copy.
In addition, you can fill out Form SS-4 and mail the soft copy to the IRS as long as your business is located in the USA. You can find the Fax, Phone number, and email address on the IRS official website.
How Long Does It Take To Get an EIN for Your Startup
If you apply online and provide the correct information, the chances are that you might get the EIN right away. On the other hand, applying via fax takes around four days, while mail might take four weeks to provide you with the EIN.
Benefits of EIN for Startup
Your business tax ID (EIN) is beneficial in many cases. It proves you as a separate business entity, even if you are operating under the same name as another business in the market.
EIN is unique for every business and can save you time during online form filling. Many online forms automatically extract details from the EIN, so all you need is to fill in the EIN box, and the form will automatically fill in the essential information. With an EIN, you get the following benefits.
Helps You Build Business Credit
An EIN can demonstrate to creditors that your business is separate from you personally. This helps establish your business as a credible borrower, which is useful in securing business loans, credit lines, or other financing options.
Easy to Get Business Loan Applications
An EIN can help speed up the business loan process as it easily attracts lenders requiring a business bank account for a loan. On the other hand, lenders that check your business credit will use this EIN to see whether you are eligible to get one.
Get a Business Credit Card
With an EIN, getting a business credit card from a different bank where you don’t have an account is easy.
They’ll use your EIN to check what account you have and its status, which removes manual entries for applying, speeding up the process of getting a credit card.
An EIN can ease the process if you expand your business and hire employees. EIN helps set up the payroll system as soon as you get your first employee without delaying the hiring process.
Demonstrates Separation Between the Individual and the Business
EIN helps single-member LLCs who want to maintain a separation between business and personal finances and assets lawfully. They can use the business EIN instead of their SSN for business documents and filing.
Finding EIN of Other Businesses
The IRS won’t provide you with the EIN of another business, so you have to use alternate methods.
Ask the Company Directly: The easiest and the best way to get the EIN is to ask the company directly, but they’ll only help you if you have business with that company. EIN is a personal identity of a business, and no one would bother sharing it without any reason.
Company Credit Report: Business credit reports are relatively easy to access compared to consumer credit reports. Some business credit reports and scores might have the EIN mentioned with other important details.
Federal and State Websites: Secretary of State's website and the Securities and Exchange Commission’s website are the two places where you have more chances of finding the EIN of other companies.
Get Help From a Third-party: You can search for EIN databases online, like einfinder.com or einsearch.com, get limited queries for free or pay a small fee, and they’ll provide you with the EIN you are looking for.
How to Cancel an EIN?
The IRS assigns a unique, permanent Federal taxpayer identification number to each business entity it works with. This EIN cannot be reused or reassigned once assigned - even if the new business is never launched.
If you have been issued an EIN but no longer require its use, your account can still be closed by the IRS upon request. You should send a letter to the IRS containing the following details.
Frequently Asked Questions
If you apply for the EIN without help from an agent, there will be no charges as the IRS won’t take a fee when providing EIN, so technically, yes, EIN is free.
The IRS doesn't have a public database to look up an EIN, so you have to seek help from third-party federal tax ID lookup services or do thorough research on government and state websites. However, if you want to check your business EIN, contact the IRS, and answer the questions to get the number.
Finding an EIN or your federal tax ID number is not challenging, as you can always contact the IRS (internal revenue service) to get one. EIN can help you fill out the tax return on time to avoid penalties, get a business account, and increase your credibility among contractors.
Remember to keep your EIN private from everyone except for the companies you want to do business with, as people can misuse your EIN.