What is an EIN? What is a Tax ID Number? Are they the same thing?
There are a few different names that all refer to the same nine-digit number — with the format 12-3456789 — that all entities must obtain from the Internal Revenue Service (IRS) in order to start a business. The IRS assigns these numbers through an application process. Below are the names and acronyms for this number:
- Tax ID Number (TIN)
- Employer Identification Number (EIN)
- Federal Employer Identification Number (FEIN)
- Federal Tax ID
- Federal Tax ID Number (Federal TIN)
The most common names are EIN and Tax ID. They both refer to the same number that is required to start a business, even if you do not plan to have any employees. EINs/Tax ID Numbers are used to identify a business entity or additional entities like Estates or Trusts, just as you as an individual would be identified by your Social Security Number.
Choosing the proper entity is important. It determines many important aspects of your business, including how much your profits are taxed, how you or your company will be treated in a lawsuit and the type of bank account you’ll be able to open.
How do I apply for a Tax ID Number/EIN?
There are 3 steps to obtaining your federal EIN:
- Select your entity type
- Fill out the information on the one-page IRS form (SS-4)
- Submit a one-time federal filing fee for one-hour* processing
When will I receive my Tax ID and when will I be able to use it?
You will receive your Tax ID Number from the IRS to your email within the same day* you submit the EIN online application through our website. GovDocFiling is committed to removing the angst and aggravation of filing government documents, helping you avoid common mistakes to get things done right the first time and move forward with your business needs. The EIN can be used immediately for most of your business needs, including:
- Opening a bank account
- Applying for a business license in your state
- Filing a tax return by mail
It’s important to note that it can take up to two weeks for your Tax ID to become recognized by official IRS records. You may have to wait until you can use your EIN to file an electronic tax return, make an e-payment or pass an IRS Taxpayer Identification Number (TIN) matching program.
Please also note that banks have different requirements. Some banks may require the official letter from the IRS, which is sent to the address provided in the online Tax ID application. This can take up to four weeks to arrive.
What entity type is right for me?
The first step in starting your business is deciding which entity type best describes your business. This can be tough to decipher, so we have created a simple survey to help guide you in the right direction.
Or you can explore the different entity types through these comprehensive resources: