An employer identification number (EIN), also known as a federal tax identification number (TIN), is used to identify a business entity. Generally businesses need an EIN. If you answer yes to any of the following questions, your business must get an EIN: Do you have any employees? Do you operate your business as a corporation or partnership? Do you file an employment, excise or alcohol, tobacco and firearms tax return? Do you withhold taxes on income, other than wages, paid to a non-resident alien? Do you have a Keogh plan? Are you involved with any of the following: Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns; estates; real estate mortgage investment conduits; non-profit organizations; farmers’ cooperatives; or plan administrators?
It’s important to remember that a business entity is separate and distinct from its owner(s), and as such needs its own identification. You can apply for an EIN online, for free, and receive your EIN immediately. The application is fairly straightforward and takes only minutes to complete.