By Fernando Berrocal

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Obtaining an Employer Identification Number (EIN) for your Startup:

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You should get an EIN as soon as possible after you have incorporated your business. An EIN is required to operate any type of business: It allows you to open a bank account in the United States and manage the payroll of your business. You'll also need it to file your taxes, too.

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What is an Employer Identification Number?

Your EIN is a nine-digit number used by the Internal Revenue Service (IRS) to identify your business. Any time you submit a federal tax return, you'll have to include it. Consider your EIN to be your organization's Social Security Number (SSN). While your EIN isn't considered confidential in the same way that your social security number is, you should be careful about who you share it with. The use of your EIN for identity theft is possible.

EIN, FEIN, TIN, and Tax ID: Your EIN is also known as a FEIN (Federal Employer Identification Number) or a TIN (Federal Tax Identification Number). All of these terms refer to the same item.  When your bookkeeper or accountant talks about your Tax ID, Federal Tax ID number, or business tax ID number, they're talking about your EIN.

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Is it truly necessary to have an EIN?

The simple answer is yes. You will need an EIN as long as you're incorporated.  Other businesses, such as sole proprietors, are not legally obliged to acquire an EIN if they fulfill specific criteria. In that situation, they will just need to utilize the Social Security Numbers of the business owner.  To open a bank account, you must have an EIN. To be clear, regardless of your business structure, you must have an EIN if any of the following apply to you:

• Employees work at your business.
• You file employment or excise tax returns.
• You deduct taxes income excluding salaries given to non-residents.

Even if none of the aforementioned apply to you, you'll need an EIN to pay employees and handle other business-related matters.

How to Obtain an EIN:

The process of obtaining an EIN is rather basic; however, there are a few factors to consider depending on the region of the world where you are located. You'll also need to finish the application in one session, so make sure you have everything you'll need before you begin.

Applying for an EIN as a US taxpayer: Residents of the US can apply for an EIN either online through the IRS website or by filling out and mailing IRS Form SS-4.

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Applying for an EIN as a non-US resident: You qualify as an international applicant if you do not have legal residency in the US or if your primary place of business is located outside of the country. The procedure of obtaining an EIN involves the following activities:

• Call the IRS (267-941-1099) from 6 am to 11 pm EST on weekdays.
• Answer the questions on the IRS Form SS-4. It's preferable to fill out the form ahead of time to ensure a smooth experience.
• The IRS representative will complete a Form SS-4 for you and create an account for you.

You can also fax or mail your application, following the directions on Form SS-4.

What you'll need to get an EIN:  Look through IRS Form SS-4 to get an idea of the main information that you'll need to apply for an EIN. You'll require the following information:

• Your organization's address, date of starting operations, and legal and trade names.
• Name of executor, administrator, or trustee
• Your SSN (Social Security Number) or ITIN (Individual Taxpayer Identification Number).
• The sort of entity you are and the reason for application.
• The final month of your fiscal year.
• The first date you paid wages.
• The principal activity of your business.

You'll also need their name and contact information if you want to choose a third party to obtain your EIN; the IRS will contact them to address questions regarding Form SS-4. The IRS will send you a letter (Notice 147C) with your EIN when you apply.

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Changing your EIN address:

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You must inform the IRS if your main place of business changes. You can do so by completing IRS Form 8822-B and submitting it to the appropriate address on the form. After that, the IRS will issue you a letter (Notice CP148A) verifying the change to both your old and new addresses. You don't have to do anything to confirm the change. If the address change is incorrect for any reason, you must return the letter to the IRS together with a completed IRS Form 8822-B indicating your new address.

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How to search for the EIN of another business:

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If you need to look for another company's EIN, the procedure is simple. You have two options:

• The EIN may be found on the back of a Form W-2 that a business has delivered to an employee.
• If the business is publicly traded, use the SEC's EDGAR tool.
• Contact the organization's accountant or utilize an EIN lookup service like TINCheck for a fee.

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