After legally forming a new business, the next thing you need to do is get an employer identification number (EIN). Think of this as the SSN for your business – it will be used to open bank accounts, show up on tax forms, and generally be the way the government keeps track of it.
The good news is that getting a EIN only takes a few minutes and is completely free.
Let me repeat: getting an EIN is free. Under absolutely no circumstances should you ever pay someone to help get you an EIN. A few companies with questionable morals have convinced people that it’s a complicated process that you need their special expertise for. They even have the top Google results for someone searching “get an EIN”, which leads many unsuspecting new business owners to think that they’re the only way to get one. (/rant)
The steps to get your number are below. Most of them are pretty straightforward, and none justify paying someone $250.
1. Go to the following IRS website: How to Apply for an EIN | Internal Revenue Service (irs.gov)
2. Click Apply Online, then Begin Application
3. Pick the legal structure for the business you just formed (LLC, partnership, etc)
4. Select how many members (owners) and the state you’re in
5. It will ask you to confirm (if you’re an LLC they’ll let you know you’re going to be disregarded entity, but that you have an option to be taxed as an S-Corp if you choose to)
6. Select why you’re applying for an EIN (will usually be because you’re starting a new business)
7. Fill out Responsible Party (that’s you). Select “I am one of the owners”
8. Fill out business address
9. Legal name of business and its start date (this is the same as what you filled out with the State)
10. The following questions:
- Does your business own a highway motor vehicle with a taxable gross weight of 55,000 pounds or more? (Probably not, but if you’re starting a construction company I suppose it’s possible)
- Does your business involve gambling/wagering? (Unless you’re starting a casino, select No)
- Does your business need to file Form 720? (This is for excise taxes- its unlikely this applies to you, but if you do things like import goods or special manufacturing then select Yes)
- Does your business sell or manufacture alcohol, tobacco, or firearms? (self explanatory)
- Do you have, or do you expect to have, any employees who will receive Forms W-2 in the next 12 months? (Select yes if you have plans to hire someone in your first year. If you’re a sole proprietor, a partnership or a single-member LLC you won’t be getting a W-2 so you can say No)
11. Select the industry that most closely aligns with your business, then the category on the next screen. If you don’t see one that matches exactly you can select Other and type it in.
12. Choose to receive confirmation Online
That’s it! Make sure you save the PDF of the letter showing your EIN (you’ll also eventually get a copy in the mail, but as you’ll need the EIN to do things now, why wait?)