Definition: A 9-digit number obtained from the IRS by a business with paid
employees. If you're a sole proprietorship, your taxpayer ID number
is your social security number.
One of the first steps you will take as a business owner is to
obtain a taxpayer identification number so the IRS can process your
returns. There are two types of identification numbers: a Social
Security number and an Employer Identification Number (EIN). Since
you most likely already have a Social Security number, let's
address the issue of EIN numbers.
The EIN is a nine-digit number the IRS issues. It is used to
identify the tax accounts of corporations, partnerships and other
entities. You need an EIN if you have employees, operate your
business as a corporation or partnership, or have a Keogh plan. Be
sure to include your EIN on all returns or other documents you send
to the IRS.
You can apply for an EIN through the phone, fax or mail,
depending on how soon you need to use the EIN. If you apply by
mail, be sure to send in Form SS-4 (Application for Employer
Identification Number) at least four or five weeks before you need
the EIN to file a return or make a deposit. If you apply by phone
(toll-free at 866-816-2065), the IRS will give you one immediately.
Before you call, the IRS suggests you complete Form SS-4 so you
have all relevant information available. The person making the call
to the IRS must be authorized to sign the form.