The easiest way to get an EIN number is through the interview-style, online EIN application.
Caution: The IRS takes up to two weeks to make your new EIN part of its permanent records. Until your EIN gets added to the permanent records, you can’t file an electronic return, make an electronic payment, or pass an IRS Taxpayer Identification Number matching program. Accordingly, if you do need an EIN, apply as soon as possible!
The online EIN application is not available 24 hours a day. At the time I’m writing this (summer of 2017), the IRS makes its online EIN application available Monday through Friday 7:00 a.m. to 10:00 p.m. Eastern time.
Fortunately, you do not need special software to complete the online EIN application. All you need to have is Internet access and a current Internet browser.
Thankfully, you also do not need special computer skills to complete the online EIN application. The online EIN application asks questions and you simply provide the answers by filling in the blanks and checking boxes and buttons.
Here are the precise steps for completing the online EIN application:
Go to the IRS online EIN application web page to begin. Scroll to the bottom of the page and click on the “Begin Application” button.
This step is very important because each type of legal and tax structure has differing rules and regulations, as well as tax reporting requirements. If your business is set up as an LLC, click the “Limited Liability Company (LLC)” button. If your business is a corporation, click the “Corporations” button.
If you click the “Corporations” button, the application will say “You have chosen Corporations” and will ask what type of corporation you will be. If you intend to be considered an S corporation for tax purposes, click the “S Corporation” button. If you intend to be taxed as a regular corporation, click the “Corporations” button. For more on the difference between these two statuses, read this FAQ article.
Note: The IRS web site supplies definitions for most of the terms used in the online EIN application. If a word or phrase appears blue and underlined, you can click on it to get a definition in a new window. Clicking on these definitions will not halt the progress of your application.
After you indicate what type of legal and tax structure you’ve chosen for the new entity, click Continue. The online EIN application then takes you to a page that explains your choice.
Go to the bottom of this page and click on the “Continue” button.
You’ll need to specify the number of LLC members, as well as the state where the business is physically located, if your business is an LLC.
Note: Different states and even different LLC operating agreements may vary in the names they use to describe LLC owners. However, for consistency purposes, the online EIN application refers to LLC owners as “members.”
Type the number of members into the field provided. Then use the drop-down box to select the appropriate state.
Click on the “Continue” button.
If you will only have one member in your LLC, you will be brought to a page that says you need to confirm your selection. This page will explain that you will be considered a Single-Member LLC.
As such, you will be classified initially as a disregarded entity for federal tax return purposes. In other words, you will report your LLC income and deductions using your 1040 tax return. For example, if you set up an LLC to operate an active trade or business, you will report your LLC’s income and deductions on the 1040 Schedule C form. If you set up an LLC to hold investment real estate, you report your LLC’s income and deductions on the 1040 Schedule E form.
Go to the bottom of this page and click the “Continue” button.
If you have more than one member in your LLC, you will be taken to a page that says your LLC will be considered a Multi-Member LLC and will be classified initially as a partnership for IRS tax purposes. Click the “Partnership” button. You will be taken to another page that explains what a partnership is and that asks you to confirm your selection.
Click on the “Continue” button.
When prompted by the online EIN application, explain why you are requesting an EIN. Your choices are:
In general, you will click the “Started a New Business” button.
Click on the “Continue” button.
Tip: Are you getting an EIN for a small business? Perhaps a new sole proprietorship or small corporation?
You should know that federal and state laws provide small businesses with dozens of useful “loopholes” for reducing income taxes.
If you want help or more information about how to take advantage of these “loopholes,” consider our popular downloadable $50 monograph Small Business Tax Deduction Secrets .
You need to designate a contact person—or what the online EIN application calls the responsible party.
The IRS considers the contact person to be the individual or business responsible for tax matters. If the IRS sends a letter to the business, for example, they send the letter to the entity’s in care of the person.
In the case of LLC’s taxed as sole proprietorships or partnerships, an individual typically acts as the contact. Note that you can designate any member (owner) as the primary member. To designate an individual member, click on “Individual” button.
In an LLC taxed as a corporation, you should identify a corporate officer as the responsible party the IRS should contact when it has questions.
Click “Continue” after you identify the type of primary member or principal officer.
The IRS also wants information about the primary member (for LLCs) or principal officer (for corporations), including name and Social Security or Individual Tax Identification Number. Don’t use any punctuation other than a hyphen (-) and ampersand (&) in the name. For instance, if you use a middle initial, do not place a period after that initial.
Note: If the contact person is a nonresident alien and therefore doesn’t have a Social Security Number, the person may be able to first obtain an Individual Tax Identification Number by completing a Form W-7, Application for IRS Individual Taxpayer Identification Number form.
No matter what type of entity your business is or how it is treated for tax purposes—sole proprietorship, partnership, C corporation or S corporation—you need to provide a physical address for your business. This address must be a U.S. address and may not be a P.O. Box. Do not use any punctuation except for a hyphen and a back slash.
You will also be required to provide a phone number. The final question on this page is whether you have an address different from the physical location where you wish to have your mail sent. If you do, you will be taken to a page to provide that address.
Note: IRS systems only allow 35 characters on the street address line. If your address does not fit in 35 characters, please make sure you provide the most essential address information (i.e., apartment numbers, suite numbers, etc.) The IRS will then validate the address you’ve provided with the United States Postal Service’s database and offer you an opportunity to make any changes to the address, if necessary.
Click the “Continue” button.
When prompted by the online EIN application, you need to provide the name of the entity, the trade name (if any), the county and state where the entity is located, the state where the articles of organization or formation are filed, and the entity start date.
Again, the online EIN application allows only two special punctuation characters: hyphen (-) and ampersand (&).
The name you provide as the legal name of your business entity should match the articles of organization or articles of formation. The business’ legal name should not contain any of the corporation name endings, such as Corp, Inc, and so forth.
Optionally, you can provide a trade name, if any. A trade name or “doing business as” name is another name under which the business or individual operates. If you use a trade name, however, the name may not contain an ending such as LLC, LC, PLLC, Corp, or Inc.
The county and state will automatically be filled in by the computer based on the physical address previously entered. However, you should verify that both of these bits of information are correct.
When prompted, identify the state where the articles of organization or articles of formation were filed. This is typically the same state as entity’s physical address.
Finally, again when prompted, you will need to provide the entity start date. This is the date on which the entity began doing business or will begin doing business. Use the pull-down menu to select a month and year.
Click the “Continue” button.
After you provide the business entity’s name, address and start date information, the online EIN application asks a series of questions about vehicles, gambling, quarterly federal excise tax returns, and alcohol, tobacco and firearms. Read the questions and answer them. For most people, the answer will be “no” to all four questions.
Click on the “Continue” button.
When prompted, choose a category that best describes your business. If you aren’t sure what a category includes, you can click on that category for a further explanation. If none of the categories fit, click on other and then click the “Continue” button.
If you choose “Other” you will be taken to a second page of options. If none of these options fit, click on the “Other” button on this page, type in what your business will do and then click the “Continue” button.
Tip: If you’re getting an EIN for a real estate investment, you may be interested in researching how to use real estate to minimize your income taxes.
We’ve got lots of resource available for you are this blog. (Use the search box in the top right corner of the window.)
But we’ve also got a downloadable reference many new real estate investors will find invaluable, our $40 Real Estate Tax Loopholes and Secrets monograph.
You can receive your EIN confirmation letter online or by mail.
If you choose to receive it online, you will be able to view the letter immediately and it will not be mailed to you. Note, though, that you will need to have the Adobe Reader program installed on your computer. This program can be downloaded for free here.
If you choose to receive the letter by mail, the IRS will send it to the mailing address you provided. This may take up to four weeks.
Click on the “Continue” button.
The last page of the online EIN application summarizes your information. Print the summary page and check the information for errors. If any of the information is incorrect, start a new application. Then, after you determine the information is correct, click the “Submit” button to receive your EIN. This process can take up to two minutes.
Note: The unique prefixes 20 and 26 identify the EIN as a number issued via the Internet.
If you forget your EIN number, call (800) 829-4933 and select EIN from the list of options in order to speak with an IRS employee. Tell the assistor you received an EIN from the Internet but can’t remember it and they will assist you.
As mentioned, the easiest way to get an EIN number is through the interview-style, online EIN application described in the preceding paragraphs. However, the IRS also provides other procedures for obtaining an EIN.
For example, you can download a paper copy of the Form SS-4, “Application for an Employer Identification Number,” from the www.irs.gov, complete it, and then mail or fax the completed SS-4 to the appropriate address or fax number.
At the time I’m writing this document, the Form SS-4 can be found here, and the Form SS-4 instructions are here.
You can also obtain an EIN immediately by calling (800) 829-4933. The hours of operation are 7:00 a.m.–10:00 p.m. local time, Monday through Friday.
Before calling for an EIN, however, you really should retrieve a copy of the SS-4 form and form instructions from the www.irs.gov web site and fill out the form as best you can before calling the number just given.
Tip: Are you, by chance, getting an EIN for a new S corporation?
An S corporation can easily annually save a business owner five or ten thousand dollars a year of tax… but you need to be careful and smart about how you set shareholder salaries.
If you need help with setting optimal S corporation shareholder salaries, you may want to grab our Setting Low Salaries for S Corporations monograph.
And a quick note: If you’re a client of our CPA firm, you don’t need to purchase this monograph. We will happily provide you with free copies of any of our monographs, including this one. Just ask for a copy next time you talk to us.
Interested in more articles like this? You can subscribe to the email newsletter version of the blog post by clicking the green Follow button that appears below.
