Everything You Need to Know About EINs: Don’t Get Scammed!
Starting a business is exciting, but with it comes a maze of paperwork and decisions. One key step in this process is obtaining an Employer Identification Number (EIN). Unfortunately, many entrepreneurs fall victim to scams that charge unnecessary fees for something that is completely free and easy to obtain. In this post, we’ll break down what an EIN is, why you need one, and how to get it—without spending a dime.
What is an EIN?
An Employer Identification Number (EIN) is a unique, nine-digit number assigned by the IRS to identify your business for tax purposes. Think of it like a Social Security Number, but for your business. You’ll use it for:
Filing taxes
Opening business bank accounts
Hiring employees
Applying for business licenses and permits
Do You Need an EIN?
Not every business requires an EIN, but you’ll need one if:
You have employees
You operate as a corporation or partnership
You withhold taxes on income (other than wages) paid to a nonresident alien
You have a Keogh plan (a tax-deferred pension plan for self-employed individuals)
You want to open a business bank account or establish business credit
Even if it’s not required, many business owners opt to get an EIN to separate personal and business finances.
How to Get an EIN for Free
The process of getting an EIN is quick and free when done directly through the IRS. Here’s how:
Go to the official IRS website – Visit irs.gov and select “Apply for an Employer ID Number” (or go here) and on the following page select “Apply for an EIN.”
Complete the application online – The online application takes about 10 minutes and provides an EIN immediately upon completion.
Apply by mail or fax if needed – If you prefer, you can also fill out Form SS-4 and submit it via mail or fax.
Beware of EIN Scams
Many websites and shady “business services” claim to help you get an EIN—for a fee. These sites often mimic the IRS website or trick you into thinking you need to pay for this service. The truth? You NEVER have to pay for an EIN.
Final Thoughts
Getting an EIN is a crucial step for business owners, but it’s also one of the easiest and most straightforward. Avoid scams, save your money, and apply directly through the IRS. A successful business starts with smart decisions—so make sure you’re not paying for something that should be free!
