An Employer Identification Number — a nine-digit ID the IRS issues to a business, used like a Social Security number for taxes, banking, and hiring.
An EIN (Employer Identification Number) is a nine-digit ID the IRS assigns to a business — think of it as a Social Security number for your company. You use it to open a business bank account, file business taxes, hire people, and fill out W-9 forms for clients.
For sellers, you can get an EIN free from the IRS in minutes, and it’s worth doing even as a sole proprietor: it lets you put an EIN instead of your SSN on client paperwork, keeping your Social Security number private. For buyers, a contractor’s EIN is what you’ll record to issue their year-end 1099.
You don’t need employees to get an EIN despite the name, and most banks require one to open a business account. If you form an LLC or elect S-corp status, you’ll definitely need one. Rules around exactly when it’s required can be nuanced, so confirm with a tax professional if you’re unsure.