Table of Contents
If you don’t plan to transfer your property into an LLC, skip to post 2.3 (rental insurance) as EINs are not needed for sole proprietorships. As of April 2024, we don't have posts on setting up a sole proprietorship, partnerships, or S-corporation, but we’ll plan to cover those in the future.
In post 2.2.3 (step 5), we introduced the EIN, if you haven’t read post post 2.2.3 start there. In this post, we’ll cover what an EIN is and how to obtain one.
What is an EIN (Employer Identification Number)?
An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit identifier assigned by the Internal Revenue Service (IRS) to business entities in the United States. Similar to how a Social Security Number (SSN) identifies individuals for tax purposes, an EIN serves as the tax identification number for a business entity for federal tax purposes.
An EIN is needed to:
Open a business bank account
Hire employees
File tax returns
Apply for business licenses & permits
Establishing business credit
File certain legal documents
Source: Form SS-4 April 2024
Overall, an EIN is a crucial identifier for businesses, facilitating interactions with the IRS, other government agencies, financial institutions, and business partners. Obtaining an EIN is an essential step for anyone starting or operating a business in the United States.
Steps to Obtain an EIN
Step 1: Confirm eligibility
Business is located in the United States
The person applying must have a valid taxpayer identification number (SSN, ITIN)
Step 2: Gather prerequisite information:
LLC Name (see post 2.2.3 step 2)
Step 3: Go to EIN application site & complete application - IRS EIN Site (application must be completed in a single sitting)
Source: Form SS-4 April 2024
Step 4: Submit the application online - you will receive your EIN instantly upon successful completion of the application process.
Step 5: Add EIN to your Google Drive (or location where you store business documents) - see post 2.1 for recommended folder structure
Download Our Project Plan Tool
In our next post (post 2.2.7), we’ll cover operating agreements. Don’t forget to subscribe to get access to our project plan tool for free:
The project plan will help you stay organized and on track - the file contains detailed steps with duration estimates, resource links, and contextual information in a single location.
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