If you are looking forward to selling on Amazon or if you already have an online business, then you’ve probably stumbled upon a term called EIN number. However, do you know what an EIN number is? Or, why you need it while selling on Amazon?
Let’s walk over what an EIN is—Employer Identification Number—why you will need it while selling on Amazon, and how to get one easily using this guide. Don’t worry; it is much easier than you think!
What is an EIN Number?
An Employer Identification Number is a nine-digit number assigned to US businesses by the Internal Revenue Service. It is a business equivalent to a Social Security Number. This number allows you to:
- Identify your business for tax purposes
- Open a business bank account
- File business taxes
- Hire employees
For an Amazon seller, an EIN is often required.
Why Do You Need an EIN with Amazon?
Whether you are a US-based seller or an international seller planning to sell in the US, Amazon will request an EIN. Here is why:
- Tax Reporting: Amazon reports your income to the IRS by using your EIN. If your business operates as an LLC or Corporation, you need an EIN to file proper tax reports.
- Professional Look: An EIN gives your business a professional look. It lets one know that you are a legitimate business; this is helpful when you have to deal with suppliers and customers.
- Separation of Finances: Using an EIN helps you keep your personal finances separate from those of your business. This is really important for correct bookkeeping and ensures that personal and business money isn’t merged together.
Who Can Get an EIN?
Nearly all business owners in the United States can obtain an EIN. You can apply for an EIN if you are:
- A sole proprietorship, LLC, partnership, or corporation
- A S. resident or foreign business looking to operate in the U.S.
Even if you’re not a resident and don’t have an SSN, you can still apply for an EIN by additional steps which will come later, too.
How to Obtain an EIN Number for Amazon: A Step-by-Step Guide
Now that we have an appreciation for the role an EIN plays in our business lives, let’s walk step by step through how we get one. And the best part? It’s free and pretty painless, too!
Step 1: Do You Need an EIN?
You want to make sure you need an EIN before you apply, so first check that you really do need an EIN. You’ll want to get an EIN if one of the following is true:
- You are creating a corporation, LLC, or partnership.
- If you’re hiring employees.
- Selling on Amazon as a business rather than an individual.
If you are a sole proprietor and you do not have any employees, then you can likely use your SSN and don’t necessarily need an EIN. However, many people still obtain an EIN so that their personal and business finances are kept separate.
Step 2: Go to the IRS Website
Step 2: Go to the IRS WebsiteThe easiest route to an EIN is via the Internet, directly with the IRS. Here’s how you can do that:
- Go to the IRS EIN Application Page: You will find the official application page of EIN on the IRS website.
- Click on “Apply Online”: Follow the instructions to complete the application, but note that this website is available to you only during certain hours of operation, so check the hours first.
- Completing the Application Form: Fill out the form with your business information as follows:
- Business Name
- Business Type (LLC, Corporation, etc.)
- Mailing Address
- Reason for Applying (opening up a new business)
- Application Submit: Verify the information and apply. In case you have filled everything correctly, then you will be able to see your EIN within minutes.
Step 3: Safe Keeping of the EIN Confirmation
Once you’re done, you will get a confirmation letter that contains your EIN. Save this document. That may become important information in your future records.
You might be needing it some years down the line when you are going to become an Amazon seller or for those times you are filing your taxes.
What about International Sellers?
You will also need an EIN if you are an international seller for selling on Amazon in the United States. Your approach is a bit different because you do not have a Social Security Number. This is how you get an EIN when you’re not a U.S. resident:
- Fill Out Form SS-4: Complete the IRS Form SS-4, the application for an EIN. Download this form from the official IRS website.
- Contact IRS: After preparing Form SS-4, you are supposed to call the IRS directly at 1-267-941-1099, which is not toll-free. Then, you will explain to them that you are an international seller applying for an EIN. They will take it from there.
- Obtain EIN: The representative of the IRS will then verify all the information you provided. Afterwards, they will furnish your EIN over the phone. Make sure that you write it down somewhere and keep it safe for future use.
Good Things to Remember When Applying for an EIN
- One application per day: An individual applicant may only have one application processed per day. Also, this may be obtained through the internet or phone.
- Processing time: Internet applications normally ensure instant processing of EINs. Those that are done over the phone or even through mail might take a few weeks.
- Accurate information: All information provided must also be accurate. This will prevent delays or re-submission.
Applying Your EIN to Amazon
Now that you have your EIN, you can put it to use on Amazon. Here’s how to do it:
- Login to Seller Central: Sign into your Amazon seller account to login to Seller Central.
- Update Your Tax Information: Click on the tax information section of your account and fill out the required EIN fields.
Amazon will verify your EIN with the IRS, so you’re good to go! Your profit from Amazon will now fall under your business’s EIN.
Conclusion
Getting an EIN for Amazon is not a bad idea by anyone serious about business expansion. There is a differentiation between personal and business finances, tax compliance, and professionalization of your business.
Now note that the procedure is free and straightforward and you can apply online or by phone if you’re an international seller. So if you’re selling on Amazon or maybe planning to start, do not wait! Get your EIN today!
Do you have any other questions on the procedure? Ask in the comments!
For further assistance with EIN applications, check out our EIN page. Also, you can check for more information on the IRS.
Want to know more about the process? Throw your questions in the comments below!