Top Benefits of an EIN (Employer Identification Number)

Open a Business Bank Account: Most banks require an EIN to open a business account—essential for keeping personal and business finances separate.

Hire Employees Legally: An EIN is required if you plan to hire employees and report payroll taxes to the IRS.

Establish Business Credit: Vendors, lenders, and credit bureaus often use your EIN to track your business credit history—just like a personal credit score.

Simplify Tax Filing: Use your EIN when filing federal, state, and local business taxes. It also helps prevent identity theft compared to using your SSN.

Build Credibility: Having an EIN makes your business look more professional and legitimate to banks, suppliers, and clients.

Required for Certain Business Structures: If you’re forming a partnership, LLC, or corporation, the IRS typically requires an EIN.

Apply for Business Licenses & Permits: Many state and local agencies require an EIN for registering your business and applying for licenses.

Protect Your Personal Information: Using your EIN instead of your Social Security Number helps protect your identity in business dealings.

Necessary for Retirement Plans: Want to set up a solo 401(k) or SEP IRA for your business? You’ll need an EIN.