So, you’re starting something. Maybe it’s a side hustle that accidentally got too big, or perhaps you’re finally launching that LLC you’ve been dreaming about for three years. Either way, you’ve hit the bureaucratic wall: you need an Employer Identification Number. Honestly, most people freak out when they realize they need to learn how to apply for a tax id, but it’s actually the one part of dealing with the IRS that doesn’t feel like a root canal.
It’s just a nine-digit number. Think of it as a Social Security number for your business. Without it, you’re basically a ghost in the eyes of the banking system. You can't open a business checking account at Chase or Bank of America without one, and you definitely can't hire that first employee.
The stuff nobody tells you about the EIN
Here is the kicker: it’s free. Totally, 100% free. If you land on a website that looks official but asks for $75 or $150 to "process" your application, close the tab immediately. Those are third-party processors. They aren't illegal, but they’re charging you for something you can do yourself in about ten minutes on the actual IRS.gov website.
The IRS website is a bit of a relic. It feels like 2004 in there. It’s only open during specific hours—Monday through Friday, 7 a.m. to 10 p.m. Eastern Time. If you try to apply on a Sunday afternoon, the "internet" is effectively closed. It’s weird, I know. A digital portal with business hours? Welcome to the federal government.
You also need to have your own ducks in a row before you click "apply." You need a valid Taxpayer Identification Number yourself—usually your Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN). If you are the "responsible party," you are the one the IRS is going to point the finger at if things go sideways. You have to be an individual, not another entity.
Figuring out if you actually need one
Not everyone needs an EIN. If you’re a solo freelancer just doing some graphic design under your own name, your SSN is usually fine. But the second you incorporate, or if you decide to form an LLC and choose to be taxed as a corporation, you're in EIN territory.
Do you have employees? You need one.
Do you operate as a corporation or a partnership? You need one.
Do you file employment, excise, or alcohol, tobacco, and firearms tax returns? You need one.
Do you withhold taxes on income, other than wages, paid to a non-resident alien? You definitely need one.
Even if you don't strictly need one, many people get them anyway. It’s a privacy thing. If you’re a 1099 contractor, do you really want to send your Social Security number to every random client you work with? Probably not. Handing over an EIN feels a lot more professional and keeps your personal identity a little more shielded.
The actual steps for how to apply for a tax id
First, go to the official IRS.gov site. Don't Google "apply for EIN" and click the first ad; look for the .gov URL. Once you’re in the "EIN Assistant," it’s going to ask you what type of legal entity you are. This is where people trip up. If you’re an LLC, select LLC. If you’re a sole prop, select that.
The "Responsible Party" section is critical. This person must be a "natural person," which is just legalese for a human being. You can't put "My Holding Company LLC" as the responsible party. It has to be you, or a partner, or an owner. You’ll need their SSN or ITIN.
The IRS will ask why you are applying. Most people select "Started a new business." If you're just opening a bank account and that's the only reason, there's an option for that too. Then you’ll provide the physical address of the business. No P.O. Boxes allowed here. They want to know where you actually are.
International applicants have it tougher
If you aren't a U.S. citizen and don't have an SSN, you can't use the online assistant. It sucks, but it’s the reality. You’ll have to fill out Form SS-4. It’s a paper form. You can mail it, which takes weeks, or you can fax it. Yes, the IRS still loves faxes.
If you're an international applicant, you can call the IRS at 267-941-1099. It’s not a toll-free number. You’ll be on hold. Probably for a long time. But they can often issue the EIN over the phone after asking you the questions on the SS-4.
Common mistakes that stall the process
Mistakes happen. The most common one is a "Name Control" mismatch. This happens when the name you give for your business doesn't play nice with the IRS database, or if the name is too similar to another company.
Another big one: trying to apply for more than one EIN per day. The IRS limits "responsible parties" to one EIN issuance per business day. If you’re trying to set up a complex web of five LLCs on a Tuesday morning, you’re going to have to spread that out over a week.
Also, watch out for the "disregarded entity" trap. If you’re a single-member LLC, the IRS basically ignores you for federal income tax purposes and treats you like a sole proprietorship. You still might need an EIN for banking or hiring, but for your 1040, everything just flows through to your personal return. People get confused and think they need to file a separate corporate tax return just because they have an EIN. Usually, you don't.
After you get the number
Once you finish the online application, you’ll get a PDF confirmation notice. Download it immediately. Print it. Save it to the cloud. Put it in a fireproof safe.
This letter (CP 575) is your official proof. Banks will ask for this exact letter. If you lose it, getting a replacement is a nightmare that involves calling the IRS and waiting for a "letter of verification" (1727L) to arrive in the mail. It can take 30 days. Don't let it come to that.
Once you have the number, you can:
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- Open that business bank account.
- Apply for business credit cards.
- Give a W-9 to your clients.
- Hire people (and start the joy of payroll taxes).
- Apply for local business licenses.
Closing the loop
Applying for a tax ID isn't the scary monster people make it out to be. It's a rite of passage. It's the moment your project becomes "real" in the eyes of the government. Just stay on the official IRS website, have your SSN ready, and do it during business hours.
If you're a non-resident, get comfortable with Form SS-4 and maybe find a cheap VOIP service to make that long-distance call to the IRS office in Cincinnati or Philadelphia.
Next Steps for You:
Gather your Social Security number and your legal business name as registered with your state. Head to the IRS website between 7 a.m. and 10 p.m. ET. Complete the application in one sitting, as the session will time out after 15 minutes of inactivity. Once you have your PDF confirmation, immediately email a copy to your accountant and save a backup in your digital files.