EIN (Employer Identification Number)
An EIN, or Employer Identification Number, is a unique nine-digit number assigned by the IRS to identify a business entity for tax purposes. Also called a Federal Tax ID Number or FEIN.
What Is an EIN?
An Employer Identification Number (EIN) is a nine-digit number (formatted as XX-XXXXXXX) that the IRS assigns to businesses, nonprofits, trusts, estates, and other entities. It functions like a Social Security Number but for your business.
Who Needs an EIN?
You need an EIN if you:
Sole proprietors without employees can use their SSN, but getting an EIN is recommended to protect your personal information.
How to Get an EIN
1. Apply online at IRS.gov (free, instant — available Mon-Fri, 7am-10pm ET)
2. Apply by fax using Form SS-4 (response in ~4 business days)
3. Apply by mail using Form SS-4 (response in ~4 weeks)
The online application is the fastest method and provides your EIN immediately upon completion.
EIN vs SSN vs ITIN
Cost
Getting an EIN from the IRS is completely free. Beware of third-party sites that charge fees for EIN applications — you can always apply directly with the IRS at no cost.
Related Terms
A sole proprietorship is the simplest business structure where you and your business are legally the same entity. There's no formal registration process — if you start earning income from business activities, you're automatically a sole proprietor unless you choose a different structure. You report
A liability is a financial obligation your business owes to another party. Liabilities include loans, accounts payable, accrued expenses, and any other debts that must be settled over time. They appear on your balance sheet and are categorized as current (due within a year) or long-term.
A fiscal year is a 12-month period that a business uses for accounting and financial reporting purposes. While many businesses use the calendar year (January 1 – December 31), others choose a fiscal year that aligns better with their revenue cycles — like July 1 – June 30 or October 1 – September 30
A business line of credit is a flexible financing arrangement where a lender approves you for a maximum borrowing amount, and you can draw from it as needed. You only pay interest on the amount you actually use, and once you repay, that credit becomes available again — similar to how a credit card w