An EIN is a unique nine-digit number the IRS assigns to a business. Here’s what it’s used for, who needs one, and how to
get one for free.
An EIN, or Employer Identification Number, is a unique nine-digit number the IRS assigns to a business for tax purposes, formatted as XX-XXXXXXX. It functions like a Social Security number, but for a business.
What It’s Used For
• Filing federal and state business tax returns
• Opening a business bank account
• Hiring employees and reporting payroll taxes
• Applying for business licenses, loans, or credit
Who Needs One
Corporations and multi-member LLCs need an EIN. Sole proprietors and single-member LLCs with no employees can often use their Social Security number instead, though most get an EIN anyway to keep business and personal finances separate.
How to Get One
Applying is free, directly through the IRS. Apply online for immediate issuance if your business is based in the U.S., or by fax or mail (about four days to four weeks). International applicants can apply by phone. Be cautious of third-party services that charge a fee for something the IRS provides free.
Once your business has an EIN and a bank account, Kavodax can help you move money across borders faster and cheaper than a traditional wire. See how it works.