3 Business Benefits of an EIN Number

While many business owners do not think it is necessary to have an EIN, they will definitely need one when hiring talent for their business. Therefore, the sooner you get one if you are a business owner the better. EIN (Tax ID) is a 9-digit number, and it is also called the Employer Identification Number. Businesses - whether small, medium or large - should have an EIN. They will enjoy numerous benefits that businesses without EIN do not enjoy. As a business owner, you should obtain your tax ID number from IRS. In certain states, it is a regulation for each business owner to get a unique tax ID number. When you get it, you will enjoy benefits relating to taxpayer and business identification, among others. 

EIN is Required for the Identification of Just About Any Business:

When you start an LLC and chances are that you will in future, you automatically become an employee of the LLC even if you are the owner. As part of the rules that you have to adhere to when starting such a business, an EIN is one of them. The EIN enables IRS to keep proper track of your business. This tracking is aimed at ensuring that your business accumulates payroll tax. 

If you establish an eCommerce business, you will also require getting an EIN for it. This is the number that the federal authority in charge of taxes will use to keep track of your business. 

The EIN is a Federal ID number that every independent contractor should have. It is helpful when it comes to identifying all the tax accounts of every employer and any other who does not have an employee. The IRS uses EIN to classify taxpayers who need to file different corporate tax returns.   

Keep Your Social Security Number Safe:

If there were no EIN, you would need to use your social security number to identify your business. This poses many risks for you because you could easily expose your social security number to cons and identity fraudsters. With an EIN, it is not as sensitive as a social security number and therefore when you lose it, you should not have to worry about it too much, at least not as much as you would worry if you lost the social security number. Losing an EIN does not leave your personal life exposed because it is only used for federal identification purposes. Depending on the nature of your business, if you will be using your SSN a lot on different forms, get an EIN for your business. 

Other Benefits Of Using EIN:

Apart from using EIN for bank purposes like opening a new account, you could use it in other ways. For instance, you could use EIN for things relating to taxes like filing tax returns each year and submitting federal iTaxes. If you might buy a separate ongoing business or change the type of your business, you should consider getting your EIN. In addition, EIN is useful for setting up trust, pensions or retirement plans. 

Another use for an EIN is when setting up your business credit. While many small business owners use their personal credit, if you have established an LLC, it would be much better to set up your business credit and keep personal separate from business. For that, you will need to have an EIN. 

The best part about EIN is that once you get it, you do not have to re-apply for another because it does not expire. It is a great move that every eCommerce business owner should consider making. It will help you to expand your business in ways that you never imagined. 

Conclusion:

Having EIN for your small business can give you so many benefits. And you need it especially when you want to hire people for your business. The good news is you can easily apply for EIN online and get your EIN processed in quick time. But you need to ensure you know exactly how to get a federal tax ID for your business. So, if you want to get above-mentioned benefits, go get your company EIN and enjoy the advantages.