Tax ID / EIN

What is a Tax ID or EIN?

A Tax ID is a number used to identify your business for tax purposes. In the United States, the most common form is an EIN (Employer Identification Number), issued by the IRS. It's like a Social Security number, but for your business.

Other countries have equivalent identifiers—VAT numbers in the UK and EU, ABN in Australia, GST/HST numbers in Canada, and so on.

When you need one

You typically need an EIN or Tax ID if you:

• Have employees — Required for payroll tax reporting
• Operate as an LLC, corporation, or partnership — Most business structures require one
• Open a business bank account — Banks usually require an EIN
• Work with clients who need a W-9 — Commercial clients often request your EIN for their records
• File certain tax returns — Required for excise, employment, and some other tax filings

Sole proprietors without employees can often use their Social Security number instead, but many choose to get an EIN anyway to keep business and personal finances separate.

How to get an EIN

In the US, you can apply for an EIN online through the IRS website for free—it takes about 10 minutes and you get your number immediately. Be wary of third-party sites that charge fees for this service; the IRS doesn't charge anything.

Using your Tax ID on invoices

Including your EIN or Tax ID on invoices adds professionalism and is sometimes required for commercial clients. It helps with their bookkeeping and may be needed for them to process your payment or issue a 1099 at year end.