Reasons for getting a new EIN

1. R Reasons for Getting a N easons for Getting a New EIN ew EIN An EIN is usually required to operate a business. The most important part of starting a new business is. A business EIN is like Your social security number. Renting or buying a house, getting a new EIN, and opening a bank account all require your social security number. EINs are similar to that. Without an EIN, you can't hire employees, form certain entities, or open a business checking account. Getting a new EIN is relatively easy. It is possible to apply for an EIN multiple ways, and you can even go for a free one. This guide guides you through everything you need to know about getting a new EIN for your business. What is an EIN? It stands for "employer identification number" and is a type of tax identification number (TIN). IRS issues EINs to business entities like LLCs and corporations. Tax reporting is the primary purpose of these unique nine-digit numbers. But, you will likely need an EIN before banks, credit card companies, and vendors will work with you. It is common for people to confuse EINs and social security numbers (SSNs), as both of these nine-digit numbers came from the federal government. But, an EIN is formatted differently than an SSN. The EIN consists of two digits, a hyphen, and then seven digits (12-1801789). The Social Security number consists of the following numbers (132-45-6769): Three, two, and four. Many different names are given to EINs. These are some common synonyms for EIN that you'll see in different contexts: EIN Tax ID number Federal tax number Federal tax · Federal employer identification number Employer ID number Business reasons for getting a new EIN Other than the government mandates, you should be getting a new EIN for several reasons. The following are a few additional scenarios when an EIN may be necessary for those who do not need one: Opening a business Banking account (most banks will require an EIN) Building business credit to qualify for loans Protecting you from identity theft Applying for a business credit card

2. Applying for a business line of credit Applying for certain business licenses 1099 forms (instead of SSN) · Establishing credibility as a freelancer or independent contractor Establishing trust with new vendors Avoiding tax penalties Having more options for retirement plans