Employer Identification Number (EIN) is a unique identification number given to businesses, nonprofits and trusts. It is issued by the IRS, for reporting taxes, obtaining licenses, and other validations. This number is for lifetime, and is not re-issued even if the business is no longer running.
It is also known as the Federal Tax Identification Number and Tax Identification Number, since businesses/corporations use it for tax purposes.
It consists of nine-digits in xx-xxxxxxx format. Similar to how individuals use their Social Security Number (SSN) for tax purposes, businesses enter their EIN number when asked for a Taxpayer Identification number.
It is fairly easy to apply for EIN. One can apply for it directly from the IRS website, or via phone or fax, all for free. You have to keep the following information ready while applying for it:
If businesses change their business structure or ownership, for instance; from sole proprietorship to incorporation, they need to apply for a new number. This may not be required if you are simply changing the location or name of the business.
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