Everything You Need to Know About Employer Identification Number

It is important for every business in the United States of America to apply for an Employer Identification Number (EIN). This number is used for the whole duration of a business's life cycle. It is beneficial right from the early stages of setting up a bank account to applying licenses for employees and also filing taxes.

In this article, we will discuss Employer Identification Number (EIN) and everything else that it entails.

What is an Employer Identification Number (EIN)?

The Employer Identification Number or EIN is also known as the Federal Employer Identification Number (FEIN). It gets assigned to every business entity so that they can be easily identified by the IRS (Internal Revenue Service). Here are a few instances when you need an EIN:

• You have employees in your company
• If you withhold your taxes on income (apart from salary) paid to any non-resident
• Need to pay alcohol or excise, tobacco, firearms or employment taxes

EINs are majorly used by employers to report taxes. This number is made of nine digits. Any business registered in the US such as Delaware LLC, Florida LLC etc. can apply for an EIN through the Internal Revenue Service, which gets issued swiftly.

Benefits of Having an EIN

Here is a list of benefits that you obtain by getting an Employer Identification Number:

Prevention of Identity Theft
An EIN actively helps to separate your business and personal finances. For instance, not having an EIN means that you have to instead provide your social security number to vendors and clients for verification. This increases the overall risk of getting identity stolen. Instead, if you are able to provide an EIN, you will have the opportunity to keep your sensitive information secure.

Hiring and Paying of Employees
If you want to have employees in your business, going through an EIN number application becomes necessary. It is absolutely worth it to file for an EIN so that you do not have to worry about the payroll process later on.

Tracking of Credits
With the aid of an EIN, business owners can establish their business credit history. This credit history considers bill payments made by your company and its financial responsibility. This makes it easier to build your business credit score and even apply for a line of credit in future. If you need a business credit card, make sure to remember that an Employer Identification Number is going to be required for a lot of card options.

Better Loan Opportunities
Sometimes, banks require the EIN of their business customers to grant business loans. Even if a bank does not explicitly state that they require an EIN for a loan, they might ask for a business checking account.

Documents Required to Get an Employee Identification Number

The documents that are required for registration are proof of your personal identity. These are needed for verifying your identification. Here is a list of documents that are required for obtaining an EIN number (Employer Identification Number):

• Proof of identity
• Proof of personal address
• Proof of address of the business
• Passport-sized photos of business owner
• Form SS-4 or Form 147c

In order to get more accurate information about the required documents, refer to the IRS's official government site. Note that the list of documents mentioned above is subject to change.

Process of Applying an Employee Identification Number

EIN registration is a hassle-free process that can be done from the convenience of your home through the IRS's online portal. Here are the steps that you need to follow to get your online Employment Identification Number for your business:

Step 1: Determine Your Eligibility
You are eligible to register an EIN application online via the IRS website if your business happens to be located within the U.S. territory. Furthermore, you must have a "taxpayer identification number" or TIN. Next, click on 'Apply Now', go through the rules and guidelines and click on 'Begin Application'.

Step 2: Select Your Type of Business
You will be required to select the type of business that you have - whether you are a sole proprietor, LLC, partnership or some other kind of entity.

Step 3: Give a Reason for Opting for an EIN
You will also be required to provide a reason for you applying for an EIN. State the reason, whether you are starting a business, opening a bank account or hiring employees for the first time.

Step 4: Provide Your Personal Information and Business Location
Now, you will have to provide your personal details, such as your social security number and whether you are eligible to get an EIN. Next, you will need to share the name and address of your business and its primary activities.

Step 5: Get Your EIN
After following through with all of the steps mentioned above and submitting, print the confirmation letter containing your EIN.

An Employee Identification Number (EIN) is a unique identifier of a business that is required for complying the tax regulations at the IRS. You can follow through with the steps mentioned in the article above to get your EIN for your business.

When considering the company registration in Florida, Delaware or any US jurisdiction and the processing of EIN (Employer Identification Number) for it, opt for services at Gryffin Capitalist. We have a team of professionals who will make the process of company registration of your business easy and hassle-free. Reach out to us today to access the services we offer!