An EIN is an employer identification number. It is a unique nine-digit number assigned by the IRS. An employer identification number is required for most business entities including corporations, partnerships, and limited liability companies.
There are many benefits of having an employer identification number;
- One benefit is that it allows businesses to file their taxes electronically. Filing taxes electronically is faster and more efficient than mailing in paper tax forms. Electronic filing also eliminates the need to keep paper records of tax filings.
- Another plus point of having an EIN is that it helps businesses open bank accounts. Many banks require new businesses to have an employer identification number before they will open a business checking or savings account. Having an employer identification number also makes it easier to apply for business loans from financial institutions.
- Lastly, having an EIN can help businesses build credit. This can be important when a business is just starting out and needs to establish business credit history. Establishing business credit can make it easier to get approved for future loans and lines of credit.
Conclusion on EIN
If you’re starting a business, one of the first things you need to do is get an EIN. An employer identification number (EIN) is a nine-digit number assigned by the IRS and used to identify businesses for tax purposes. It’s required if you have employees, but even if you don’t, it’s still a good idea to get one so that you can open a business bank account and build business credit. Getting an employer identification number is simple and free, and it’s something every business owner should do as soon as possible. Follow the instructions in this article and you’ll be up and running with your very own employer identification number in no time.