You can get an Employer Identification Number for your small business for free at the IRS website.
If your business needs an EIN (that’s an employer identification number), it takes about 5 minutes on the IRS website and you can get one for free. I mention this because I found a company online that will do it for you for $75. For an extra $75, they’ll put a rush on it. So you can pay $150 for the rush job, or you can do it yourself for free in less time than it takes to fill out their online payment agreement.
The first step is to go to the IRS website. This link will take you right to the EIN page.
This page has links to a lot of information so it’s pretty useful. It also has the link to go to the EIN application. The online application has limited working hours, you’re not going to be able to file the application at 3 in the morning. They’re basically open from 6 am until a little after midnight Monday through Friday with limited weekend service.
Before you actually apply for an EIN, think–do you really need one? If you’re a corporation or a partnership, the answer is yes. If you are an LLC, that means you are a limited liability company-that does not make you a corporation, so just because you are an LLC doesn’t mean you need to have an EIN. Other reasons for needing an EIN include if you have employees, need to pay excise taxes, are a non-profit organization, trust or estate.
You might not need an EIN per IRS standards, but it may be beneficial to your business anyway. For example: if you work as an independent contractor and do not want to give your social security number out or you are setting up a bank account in your business name. Some vendors won’t give you business discount rates unless you have an EIN number, and I had one client who needed one because a vendor wouldn’t work with her at all because she didn’t have an EIN and she really needed the account.
Generally,iIf you are working as a contract laborer and filing your return as a sole proprietor, it’s most likely that you do not need to have an EIN number.
Applying for the actual EIN: I recommend using the online application. The application is presented in an interview style format. It asks questions, you answer them and when you get to the end. voila’ you have an EIN number. It sort of has a dummy proof mode too that let’s you tab back if you’ve answered a question incorrectly. I recommend having access to a printer when you do it so that you can print out your new EIN when you’re done. You don’t want to lose that number once you’ve got it.
Before you do the online application, you might want to check out the written application form so that you have all of your information handy before you apply: http://www.irs.gov/pub/irs-pdf/fss4.pdf
To go straight to the online application, click this link:
https://sa2.www4.irs.gov/modiein/individual/system-unavailable.jsp
On little glicth, for some reason, if you need an EIN because you receive home health care services, you can’t apply for your EIN online, you have to use another application method. I suggest calling on the toll free number: 1 (800) 829-4933. That’s the toll free number for the tax and business specialty hot line. You will have to wait on hold for awhile, but it’s still faster than using the mail.
Hi Runmaxshoe,
Yes, you will get your EIN immediately if you ask for it.
After all validations are done you will get your EIN immediately upon completion.
Hi Karen,
Yes. Get an EIN. It’s free and it only takes about 5 minutes to do online.
My husband and I have rental property that has always been rented to an individual. Last year we entered into a lease with a business. They are asking us to complete a W9 to report the rent. We do report the income received on our tax return, but I am uneasy providing our social security numbers to the tenant. Should we apply for an EIN?
Hi Summer,
You don’t have to have an EIN yet. If you were to do these jobs for a business, and they asked you for a W9 (that’s the form the use to issue you a 1099MISC) then I’d suggest that you get an EIN number. But if everyone is paying you in cash, then I wouldn’t bother with one yet.
Do I need an EIN if I babysit sometimes, yard work, clean houses or walk dogs? All jobs paid me in cash. How do I file?
Hi Jessica,
The property manager needs to have to fill out a W9 because you’re doing work for a business. They can get into big trouble for not getting that paperwork done.
Here’s a link to the W9 form: http://www.irs.gov/pub/irs-pdf/fw9.pdf
You’ll just put your name, address, phone number and your social security number on there. Check the box that you are a sole proprietor. That’s how you’ll get paid.
If you want, you can apply to get an EIN number, but you don’t really have to. If you’re working for a legitimate business and you trust them it’s like giving your social security number to your employer for a paycheck.
If you want to know more about W9s and why employers are asking for them, here’s a link to a different post I did awhile back: http://robergtaxsolutions.com/tag/w-9/
Because you’re doing a service for a business, you can expect to receive a form called a 1099 next January. It will say how much money you earned working for that company. The IRS also gets a copy of that form so when you’re reporting your earnings, make sure you report your 1099 earnings on your tax return since the IRS matches those documents to your taxes.
Hi I have a question I work as a self employed on house cleaning services but one of my clients is a property manager on a building and in order for her to paid me now she’s requesting for a w9 form witch I don’t have what type of document I can provide d her with in order for me to get paid .
Thanks
Hi Gary,
A couple of things. Most important is in the EIN number but your IRS determination letter that you are a not-for-profit organization. GuideStar won’t go by the EIN because anybody can get an EIN, they go by the IRS non-profit database.
Now, If you’ve filed your form 1023 and gotten your IRS notification that your organization is a legitimate non-profit, it may still take some time to get listed–not three years though. But here’s a link about showing up in the IRS database: https://angel.co/green-aid-foundation-international
Because that’s where GuideStar gets it’s information.
Bottom line, if the IRS doesn’t recognize you as a 501(c)(3) charitable organization, then neither does GuideStar. So if you’re trying to raise funds as a not for profit, then you need to be recognized as one. That starts here: http://www.irs.gov/uac/Form-1023,-Application-for-Recognition-of-Exemption-Under-Section-501(c)(3)-of-the-Internal-Revenue-Code
Good luck.
I have had an EIN for three years, and they still have not activated it within the system! GuideStar doesn’t even recognize it. In spite of sending copies of the actual letter from the IRS office showing my EIN, it does’t help unless it becomes active on the system’s database. What is their problem?