Short Answer: An Employer Identification Number (EIN) is the federal tax identification number assigned to your business by the IRS.
Why It Matters: You will generally need an EIN to open a business bank account, hire employees,file certain tax returns, and establish your business as a separate financial entity. You can apply for an EIN at the IRS website:https://www.irs.gov/businesses/small-businesses-self-employed/get-an-employer-identification-number.
Common Mistakes: Waiting until tax season to apply; unnecessarily using your Social Security number.
Michelle's Bottom Line: Obtaining an EIN is one of the first administrative steps every new business should complete.
