You're probably reading this because you need a tax ID number yesterday. Maybe your bank asked for it to open a business account, or you're hiring your first employee. I remember scrambling to get mine when launching my consulting side hustle - the IRS website felt like a maze and I wasted three weeks using the wrong form. Let's cut through the confusion together.
What Exactly Is a Tax ID Number?
Think of it as a social security number for your business. The IRS calls it an EIN (Employer Identification Number), but it's also known as FEIN or Federal Tax ID. If you're not a U.S. citizen, you might need an ITIN (Individual Taxpayer Identification Number) instead. Confusing, right? Here's how they differ:
| Type | Who Needs It | Purpose |
|---|---|---|
| EIN | Businesses, nonprofits, estates | Business banking, hiring employees, tax filings |
| SSN | U.S. citizens/legal residents | Personal taxes, employment (for individuals) |
| ITIN | Foreign nationals/entities | Tax compliance without work authorization |
Your Step-by-Step Guide to Getting an EIN
After helping 50+ clients through this, I can confirm this is the fastest path:
Who Actually Qualifies?
You need an EIN if you:
- Hire employees (even family members)
- Operate as a corporation or partnership
- File employment, excise, or alcohol/tobacco taxes
- Have a Keogh plan (retirement account)
Sole proprietors without employees? Technically you can use your SSN, but I always recommend getting an EIN. Why? It reduces identity theft risk and looks more professional.
Materials You'll Need
Gather these before starting:
- Legal business name and address (no PO boxes)
- Responsible party's SSN/ITIN (that's usually you)
- Business formation date and type (LLC, Corp, etc.)
Pro tip: Make sure your business name matches exactly what's on state filings. One client got rejected because they used "&" instead of "and".
The Online Application Walkthrough
This is how most folks get a tax ID number:
- Go to the IRS EIN Assistant website (irs.gov)
- Select "View Additional Types" and choose your entity
- Complete the multi-page form (takes 10-15 minutes)
- Get your EIN immediately upon submission
Available Monday-Friday, 7am-10pm Eastern. I did this at 2am during my insomnia phase - took 11 minutes flat.
Watch Out for These Application Killers
- Using browsers with pop-up blockers (disable them!)
- Timeout errors after 15 minutes of inactivity
- Mismatched business/jurisdiction info
Fun fact: The IRS rejects ~8% of online applications. Most failures stem from incorrect entity classifications.
Alternative Application Methods Compared
Can't apply online? Here are backup options:
| Method | Processing Time | Best For | Drawbacks |
|---|---|---|---|
| Fax | 4 business days | International applicants | Requires Form SS-4 completion |
| 4-6 weeks | Non-urgent requests | No tracking, frequent delays | |
| Phone | Immediate (if eligible) | Foreign entities without SSN | Only for international applicants |
Honestly? Faxing beats mailing. A client in Montana got hers in 3 days via fax vs. 7 weeks by mail last tax season.
Post-Application Checklist
Got your EIN? Do these immediately:
- Store your confirmation letter (Form CP 575) securely
- Update banking/financial institutions
- Register with state tax agencies (separate process!)
Most people forget state requirements. In California for example, you need a separate SID number for payroll taxes.
How to Verify Your EIN Status
Lost your number? Try these:
- Find original confirmation letter (check email if applied online)
- Call IRS Business & Specialty Tax Line: 800-829-4933
- Pull business credit report (Dun & Bradstreet)
No online lookup exists - which I find ridiculous in 2024. Prepare for phone hold times exceeding 45 minutes.
Top Questions About Getting Tax ID Numbers
Q: How can I get a tax ID number for free?
A: Directly through IRS.gov only! Third-party sites charge $79-$200 for what's fundamentally a free government service. Big pet peeve of mine - they prey on confused entrepreneurs.
Q: Can I get same-day EIN confirmation?
A: Absolutely through the online system. Instant confirmation is standard unless you trigger fraud alerts. Faxed applications take 4 business days.
Q: What's the difference between EIN and sales tax ID?
A: Your EIN is federal. Sales tax IDs are state-specific permits for collecting sales tax. You'll need both if selling taxable goods/services.
Q: How can I get a tax ID number without a Social Security Number?
A: Foreign applicants should complete Form SS-4 and fax it to 304-707-9471. Write "Foreign/No SSN" in the responsible party section.
Q: Can I reuse an old EIN for a new business?
A: Nope. EINs are like business fingerprints - one per entity. Using an old EIN for a new venture causes massive compliance headaches.
Special Circumstances You Should Know
These exceptions trip people up:
For International Applicants
Non-U.S. entities must:
- Apply by fax or mail (online unavailable)
- Use "Foreign" as county on Form SS-4
- Provide foreign address
No U.S. address? That's okay. I assisted a Canadian client who used her Toronto address successfully.
Changing Business Structure
Switching from sole proprietorship to LLC? You'll need a new EIN if:
- Creating a corporation or partnership
- Taking on co-owners who weren't previously partners
Simple ownership changes usually DON'T require new EINs. The IRS has a helpful flowchart on their website.
Why This Matters More Than You Think
Beyond legal compliance, your EIN affects:
- Business credit: Vendors and lenders check this
- Identity protection: Reduces SSN exposure
- Professional image: Clients trust businesses with EINs
I've seen business loan applications get denied over mismatched EIN paperwork. Annoying but preventable.
Final Reality Check
The IRS issues over 5 million EINs annually. Despite that volume, their systems feel outdated. Preparation prevents frustration:
- Set aside 30 uninterrupted minutes
- Triple-check your entity classification
- Print/save confirmation immediately
Worst-case scenario? You mess up the application. It happens - just reapply with corrected info. The IRS doesn't penalize honest mistakes.
Last week, a reader emailed saying they'd paid $179 to a "expedited service" that just submitted the free IRS form. Don't be that person! Now you know exactly how to get a tax ID number without the headaches.
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