Starting a business does require some paperwork, but it is a lot easier than most people realize. You can pay a lawyer or legal document service to do this for you, but filling out the form yourself may be even faster and can save you quite a bit of money. In this article, we talk about how to sign up for your own EIN for your business to open a bank account.
What is an EIN and how is it related to a Bank Account?
An EIN is an employer identification number. While that sounds like something only needed if you are hiring employees, that is far from the truth. In reality, an EIN is like a social security number for a business.
You can use an EIN to do the same things you would use your social security number for. An EIN is needed to open a bank account, when working with a new client, and when filing your business taxes. If you do hire employees, it is also used for your employee tax filing documents with your state and the Federal government.
What Types of Businesses Need an EIN?
If you are just working under your own name as a sole proprietorship, you do not need an EIN. In that case, you can just use your social security number to open a bank account, file taxes, and take care of all of your business financial needs.
If you are operating as a registered business like an LLC, S-Corp, or C-Corp, you should get an EIN. Because the business is operating as its own entity under its own name, it needs its own tax ID number, and that is exactly what an EIN is used for.
You don’t have to be operating as a full-time business to count as a business in the government’s eyes. Any side hustle could be registered as a business if it makes sense for you and your project.
Where to Fill out the EIN Form
You can fill out the EIN form by hand or online. The easiest option for most solo entrepreneurs, including freelancers, is to submit the EIN application online. This submits the form directly to the IRS and you should get a response with your new ID number instantly in most cases.
Some complex businesses and partnerships may need to submit the form manually; by mail, or by fax. The online application is available here. Because the government doesn’t understand the internet, you can only apply Monday through Friday 7 a.m. to 10 p.m. Eastern Time. To apply by mail or fax, complete form SS-4.
Important EIN Application Information
Form SS-4 and the online application are legal applications filed with the IRS. It is important to be accurate and thorough or you may encounter hassles down the road. Complete your business filing with your state’s Secretary of State or business registrar’s office first. Afterward, use that information to file your EIN application.
Once you have your EIN, you are able to open your business bank account, complete W-9 forms for clients, and get back to work on your business. After all, your business is what it’s all about!