The Common Law

Employer Identification Number for My New Business?

Employer Identification Number For My New Business?

I'm starting a new business, and when I went to the bank to open an account, they asked for my company's employer identification number. What is that, and how do I get it?

An employer identification number (EIN) is a nine-digit number assigned by the Internal Revenue Service. The IRS uses the EIN to identify taxpayers that are required to file various business tax returns.

On a conceptual level, think of an EIN as the social security number for your business. In the same way that the IRS tracks individual tax returns via a social security number, the IRS can identify and track tax consequences of a business with the EIN.

EINs are used by employers, sole proprietors, corporations, partnerships, nonprofit associations, trusts, estates of decedents, government agencies, certain individuals, and other business entities. You should have only one EIN for the business entity. The EIN is used on all items that you send to the IRS and Social Security Administration. Check out the IRS website for more detailed information on which business entities require an EIN (www.irs.gov/pub/irs-pdf/p1635.pdf).

Assuming your business needs an EIN, you can apply for it with the IRS online, by telephone, by fax, or by mail, depending on how soon you need to use the EIN. Go to the IRS website at www.irs.gov (keyword "EIN"), and fill out the online application. If you complete the application successfully, you will receive your EIN immediately, which will allow you to save and print your confirmation notice (and demonstrate to others, like the bank, that you have the EIN). You can also apply by telephone to get your EIN (800/829-4933); however, the IRS suggests that you complete Form SS-4 prior to calling so that you will have all the relevant information.

Please submit column suggestions, questions, and comments to thecommonlaw@austinchronicle.com. Submission of potential topics does not create an attorney-client relationship, and any information submitted is subject to being included in future columns.

Marrs, Ellis & Hodge LLP, www.jmehlaw.com.

The material in this column is for informational purposes only. It does not constitute, nor is it a substitute for, legal advice. For advice on your specific facts and circumstances, consult a licensed attorney. You may wish to contact the Lawyer Referral Service of Central Texas, a non-profit public service of the Austin Bar Association, at 512-472-8303 or www.austinlrs.com.

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