A Federal Tax ID Number or Employer Identification Number (EIN) is a nine-digit number issued by the Internal Revenue Service (IRS) to businesses and organizations. If your business needs an EIN, you can get one from the IRS for free. There are several ways you can apply for the number.
Definition
A Federal Tax ID number is used by the IRS to ensure compliance with tax laws. The IRS uses the number, which has the format xx-xxxxxxx, to match your business's reported income, expenses and deductions with the income, expenses and deductions of your employees, clients, contractors and other business partners. An EIN works similarly to a Social Security Number and can be used to open a bank or brokerage account and apply for credit.
Instant EIN for Free
The IRS' online EIN Assistant is a free, interview-style application that walks you through the process step-by-step. It's free to submit the application, which takes about 20 minutes to complete. At the end of the application, you'll be issued an EIN instantly in the form of a PDF. Save the PDF to your computer or print a copy of your EIN for your records. If you prefer to apply by phone, call the IRS at (800) 829-4933. At the end of the interview, you'll be given your EIN.
By Mail or Fax
You can apply for an EIN by mail or fax. The application costs nothing, but you won't get an instant EIN. You may have to wait as long as a month for processing. To file, fill out form SS-4 and send the application to the address where you would normally file your taxes. If you don't know where you file your taxes, the IRS provides a list of IRS tax return offices.
Caution
There is no charge to get an EIN from the IRS. However, you may come across a company that offers to apply for your EIN for a fee, ranging from several dollars to hundreds of dollars. The EIN application is an interview-style application that takes minutes to fill in, so there's no need to pay a third party to file for you. It will take you as much time to fill out a third-party application as it would for you to fill out the official IRS version. Save your money and bypass third-party vendors.
