Does My Small Business Need a Federal Tax ID Number?

Do I Really Need It?

The simple answer is, “Yes.” Any business offering taxable products or services needs a federal tax identification number is order to operate legally. As a small business owner you will find that every financial and legal document you fill out will require a tax ID or EIN, your businesses Employer Identification Number. Your EIN or tax ID is a unique number assigned to your business by the IRS and used by several federal and state agencies. It is safe to assume that if you have employees, pay taxes of any kind, or hope to make a profit, then you will need a tax ID. And, luckily, obtaining a tax ID is simple and free for all business owners.

How Do I Get It?

To register for a federal tax ID number contact your local IRS field office, or call the IRS Business and Specialty Tax Hotline at 800-829-4933.  You can also apply directly through the IRS’ website. The form is straightforward and should only take a few minutes to complete. If your online form is accepted, then you will receive a confirmation immediately. You can download, save, and print your EIN confirmation and begin doing business the same day! If you want to apply via the post then you will need to fill out IRS Form SS-4 and submit it either in person or through the mail to your local IRS office.

Some small business owners are confused by the term “Employer Identification Number,” and mistakenly assume that they do not need to apply for an EIN because they are the sole employee of their business. However, even if your business does not have any employees, the IRS still requires that you fill out a Form SS-4 for identification purposes.



Marshall Walker Lee graduated Summa Cum Laude from the University of Michigan's Honors College with degrees in Writing and Philosophy. As a freelance writer and designer he has developed branding strategies and programming for J. Walter Thompson, Nike, the Kellogg Foundation, Spike TV, Sony Films, and General Motors. He is the co-founder and director of Poor Claudia, a 501(c)3 non-profit publishing enterprise based in Portland, Oregon.