An Employer Identification Number (EIN) is a nine-digit number issued by the IRS to keep track of a business’s tax reporting. An EIN is also known as a Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN). Applying for EIN is a FREE service offered by the Internal Revenue Service.
No matter what the size of your business, even if it is only a part-time or full-time gig, an EIN is an important tool to have for a few reasons, including business, estate, or trust banking, and hiring employees. Businesses may also need EINs when they are required to file employment tax returns; excise tax returns; or alcohol, tobacco, and firearms returns. The ID number makes it easier to file federal and state taxes, quarterly or annually. If you receive an EIN but later determine you do not need the number, the IRS can close your business account.
These are some of the reasons why you may want to get an EIN:
- To help file your Notary business taxes and avoid tax penalties
- Prevent identity theft
- Add credibility as an independent contractor
- Open a business bank account
- Establish business credit
- Speed up business loan applications
- Separation of personal and business finances
- Protection of assets from business losses
Applying for an EIN from the Internal Revenue Service is FREE and can be done online. You will only need to provide some basic information about your business-like name, mailing address, your name, etc. The IRS site also helps you determine what type of business you have. Remember there is no need for third-party assistance that is going to charge a fee for this FREE service.