If you are a business owner, or you are thinking about starting a business, chances are you have heard of the acronym EIN. It stands for Employer Identification Number and is one of the most important pieces of information to keep about your business.
But what is an EIN number, what does it do, and why should you have one if you run a business or are self-employed?
The Employer Identification Number
An Employer Identification Number is essentially a Social Security Number but for your business. This means that it is the number that the federal government uses to identify your company on tax filings and other documentation.
Having one of these numbers can help you in a few ways. Firstly, it gives you the ability to file your business separately from your personal taxes. If you have an EIN number, you can request your company be considered different kinds of entities for tax purposes and separate the business from your personal income taxes.
Secondly, it helps protect your personal liability. If things go wrong with your business or it is embroiled in a lawsuit, you will be much better off if your business is established as an LLC and has its own identification number. Reach out to a lawyer for legal advice if your company is in a situation like that.
How can I obtain one?
Getting an EIN for your business is easier than you think. If you already have an LLC, reach out to the people who registered your business to see if your LLC already has an EIN number or if they can assist you in obtaining one.
If you have not yet opened an LLC, reach out to us so we can begin the process. In our LLC opening package, an EIN number is included and can often be obtained that same day.
Conclusion
If you have a business or are thinking about starting one, it is a good idea to familiarize yourself with EIN numbers and to obtain one for your business.
ER Financial can take care of this paperwork for you and more, offering bookkeeping, payroll, notary, tax services, and more to serve your business and help you succeed.
