Glossary
EIN (Employer Identification Number)
The nine-digit federal tax ID the IRS assigns to a business entity. Needed to open a bank account, file returns, hire staff and file Form 5472.
An EIN is to a company what a Social Security number is to a person: the number the IRS uses to track its filings. Every LLC and corporation needs one to open a US bank account, run payroll, file returns or apply for a merchant account. Sole proprietors with no employees can use their own SSN, but most get an EIN anyway to keep the business separate.
A non-US owner without an SSN or ITIN can still obtain an EIN. The online application is not available to them; the SS-4 goes by fax or phone, and a response takes anywhere from a day to several weeks. The IRS charges nothing for it. Services that charge for "expedited EINs" are charging for form-filling.
Common mistakes: applying under the wrong entity type (which fixes the LLC's default tax treatment in ways that are painful to undo), listing a formation agent as the responsible party, and losing the CP575 confirmation letter that banks ask for years later.
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