What is an EIN and who needs one? Get your federal tax ID

Why do you need an EIN or Tax ID for your business? Learn more about who needs a federal tax ID and register your EIN for only $39 when you file an LLC with Nearside.
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What is a Federal Employer Identification Number? (EIN)

A business federal tax ID that works like a Social Security Number for your business. Also known as a “Tax ID number,” the EIN allows you to file tax returns for your business. It is often required to open a bank account, which helps you properly pay and account for your business expenses. An EIN helps your business build credit and maintains your business as a legal business entity.

Why do I need an EIN?

Most businesses require an EIN, unless your business is a sole proprietorship with no employees and no separate legal entity. An EIN allows you to operate from a financial level. The SS4 is the IRS form required to obtain an EIN (Employer Identification Number, frequently called a Tax ID number). Single-member LLCs do not need EINs, unless the LLC is required to file excise tax returns or employment tax returns.
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Get your taxes right with Nearside EIN services

Business owners can get an EIN by filing IRS Form SS-4. Nearside support agents file for your EIN online quickly and efficiently when you’re forming an LLC with us. It only takes 5 minutes to get started.

Who needs an EIN?

LLCs taxed as partnerships or corporations

If your LLC elects to be taxed as a partnership or a corporation, it will require an EIN number.

Multi-member Limited Liability Companies (LLCs)

If your LLC has more than one member, or owner, it will require its own EIN. Individual owners cannot elect to use their personal SSN for the LLC for tax purposes.

Sole proprietors with employees

If your sole proprietorship employs one or more people, or if you plan to hire employees in the next 12 months, you will need an EIN.

Trusts

Some trustees or other fiduciaries may need an EIN number, depending on the type of trust. Custodianships, conservatorships, guardianships, GNMA pools, FNMA pools, and escrow accounts all may require their own EIN.

Single-member Limited Liability Companies (LLCs)

While an EIN is not required for single-member LLCs, it’s a good idea to get one in order to separate your individual Social Security Number from your business finances.

Corporations

Since a corporation is a separate legal entity, with shareholders instead of owners, it requires its own EIN number.

Household workers and employers

Household workers include babysitters, nannies, healthcare workers, nurses, maids and caretakers. If you are a household worker, or if you employ household workers, you will have to apply for an EIN.

Estates of the deceased

If you are the executor of a deceased person’s estate, you may have to get an EIN number in order to do taxes and collect and distribute assets on the estate’s behalf.

Partnerships

A partnership, by definition, is owned by two or more individuals. Instead of a single owner using their EIN or SSN, the business is required to apply for its own.

What Nearside EIN/Tax ID  Services offer:

Affordable pricing, just $39 one-time-payment for us to file on your behalf with the IRS
We handle your paperwork with thorough accuracy
Priority Customer Support
Same Day Preparation

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Frequently asked questions

When will I receive my Federal Employer Identification Number?

After filing for your LLC with Nearside, we will file for your EIN number and send it to you along with your LLC articles of organization. Processing time varies by state, so just ask us for the typical wait time for your location.

How do I find my EIN number?

When you use Nearside, we will send your letter from the IRS containing your EIN number as soon as we receive it.

Is an EIN the same as an LLC?

An LLC is a business entity, while an EIN serves to identify your business for tax purposes. You can think of it like a social security number for your business. A single-member LLC only needs an EIN number if it has one or more employees, whereas all multi-member LLCs need an EIN.

What is an EIN number used for?

An EIN number is used to file your business taxes with the IRS. Other uses for your EIN number include:

  • Preventing identity theft. An EIN number allows business owners to separate their business finances from their personal finances. Whenever you open a bank account or apply for a loan using an EIN instead of your personal SSN, you prevent the risk of your SSN falling into the wrong hands.
  • Adding credibility as a contractor. For self-employed contractors, an EIN or SSN is required to take on new clients using the 1099 tax form. Using a business tax ID shows clients that your business is credible and established.
  • Building better relationships with vendors. Venders will often perform an EIN lookup before working with small business owners. Having a business tax ID already set up helps prove that your business is a trustworthy entity.
  • Opening a business bank account. While some banks, including Nearside, allow LLC owners to open a business bank account without an EIN, other banks require an EIN number.
  • Applying for business loans faster. Most lenders do not require an EIN to apply for a business loan, but they typically require a business bank account with a minimum number of deposits. An EIN number also helps you build business credit, which can help with qualifying for the loan.
  • Establishing business credit. Whenever you apply for credit by providing your EIN, it will show up in your business credit report. When you make timely payments to those accounts, your credit score will grow, helping you land better loans and lower rates with vendors.

When do I have to change my EIN number?

If the organizational structure or ownership of your business changes, you may need to obtain a new EIN number. Here are some of the circumstances under which your business would require a new EIN:

  • Your business is bought or inherited by a new owner who will operate as a sole proprietor.
  • Your sole proprietorship becomes an LLC, partnership, or corporation.
  • Your partnership becomes an LLC, partnership, or corporation.
  • Your corporation becomes an LLC, partnership, or sole proprietorship.
  • Your LLC becomes a partnership, corporation, or sole proprietorship.
  • A business owner dies, and the inheriting estate takes over the business.

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Nearside is a financial technology company and is not a bank. Banking services provided by Piermont Bank; Member FDIC. The Nearside Visa® Debit Card is issued by Piermont Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.

  1. You will earn 1% cashback plus a 1.2% cashback bonus in 2022 (total 2.2%) by using your Nearside business debit card for purchases. You will not earn cashback rewards on purchases of cash-like instruments (money orders, gift cards, etc.), peer-to-peer payments, money transfers and other transactions that do not involve purchases of goods and services. Terms and conditions apply.