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Tax & Compliance
EIN (Employer Identification Number)
Definition
A unique nine-digit number assigned by the IRS to identify a business for tax purposes.
Overview
An EIN is like a Social Security Number for businesses. It's required for hiring employees, opening business bank accounts, and filing business taxes.
Example
A new LLC applies for an EIN (12-3456789) through the IRS website to open a business bank account.
Best Practices
Apply through IRS.gov. Include on invoices, tax returns, and when opening business accounts.
Common Mistakes to Avoid
Using SSN instead of EIN
Not applying when required
Losing the EIN letter
Frequently Asked Questions
Do I need an EIN?
Required if you have employees or operate as a corporation/partnership. Recommended for all businesses.