EIN

downloadAn EIN, or Employer ID Number, is a nine-digit identification number assigned by the Federal Internal Revenue Service to a variety of entities (corporations, llcs, trusts, etc) for a variety of purposes (opening a bank account, hiring employees, etc). Legal Nature gives a good rundown of who needs them and for what reasons, but consider consulting your lawyer and accountant to determine whether you need one for your business.

An often overlooked reason you may want an EIN is that, if you are an independent contractor (i.e. not an employee of your client), then your client may need to fill out a W-9 Tax Form to account for your work for them as their expense. If you don’t have an EIN, then they’ll need your social security number, which is definitely not a number you want floating around. For that reason, when you start work for a client, either have your EIN easy to find or, better yet, memorized: doing so signals that your business is established and that your work for them isn’t your first rodeo.

If you determine you need an EIN, you can apply for one at the IRS website.

Oddly, even though it’s an online form, you need to complete the IRS EIN application during its business hours.

Finally, on the document that IRS sends you containing your EIN number, it reminds you that, “This notice is issued only one time and the IRS will not be able to  generate a duplicate copy for you,” so print it, file it, and back it up.

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