If you need an Employer Identification Number for your business, you’re probably wondering, how much is an EIN number. An EIN is free, but the process of obtaining an EIN generally costs some money. To help you plan ahead, this guide looks at the costs and steps involved in getting an EIN.
Whether you’re opening a business bank account, getting ready to hire employees, looking for an EIN for federal tax returns, or applying for an EIN for any other reason, this guide will walk you through the costs you’re likely to incur. This guide answers questions like how much does it cost to get an EIN number as well as others.
Is Getting An EIN Free?
One of the first questions people have when they realize they need an EIN is, how much does it cost to get an EIN number? If this is your question, you’ve come to the right spot. The answer is nuanced. The number is free, but there are usually other costs involved.
The Internal Revenue Service does not charge anything for an EIN. This is similar to how the Social Security Administration doesn’t charge taxpayers to get a Social Security Number, and the IRS doesn’t typically charge a fee for any other type of taxpayer identification number.
However, getting this number can require professional help as well as time and supplies. Depending on your situation, you may also have to jump through other hoops which can cost money. Keep reading to learn more.
Costs of Filing for an EIN
As indicated above, you can file Form SS-4 or request an EIN online for free, but there are a few additional costs involved in the process. If you’re applying for an EIN for an LLC, for example, you need to form the LLC first. You may need to hire a business formation company to help you with the paperwork. Most states also charge a fee to register an LLC for you.
If you need an EIN for another type of business entity such as an S-corp or a C-corp, you will need to establish that business structure before applying. Setting up an S-corp requires you to send an election to the IRS — tax pros charge for this service. A c-corp requires you to draft articles of corporation, file with the state, and issue stock. These steps as well as any others can also cost you money. Similarly, if you need an EIN for a trust or an estate, you may also need to do some preliminary legwork before you start the EIN application.
Once you’re ready to apply for the EIN, you may incur costs related to hiring someone to help you apply. This is similar to how a new arrival to the country might pay an immigration attorney to help them apply for a tax identification number. You may also have to pay costs to print, mail, or fax paperwork. Because of that, it’s usually the fastest and cheapest to apply for an EIN online.
Do You Have to Pay for an EIN If You Don’t Have a Social Security Number?
The cost of an EIN is the same whether you have a Social Security Number or not. However, if you don’t have a tax ID number, you may need to spend some money obtaining one before you start the EIN application. When you apply for an EIN, you need to note a responsible party and their tax ID number. This party must be an individual. They can’t be a business entity. If you don’t have a tax ID, you may need to hire a specialist to help you obtain one.
Do You Need a Business License to Get an EIN?
You don’t necessarily need a business license to obtain an EIN. However, this rule depends on what type of business you have and whether or not it requires a license. For example, imagine that you are opening a hair or nail salon. You will need a license to operate this type of business.
There are many different types of business licenses. Some, like the salon example noted above, are quired for specific types of businesses due to safety and professional concerns. Others are related to certain types of taxes. For instance, if you sell retail items, you will need to obtain a sales tax license. In a lot of cases, local governments require all brick-and-mortar businesses to get a license before they open. Regardless of the type of license, you will generally incur a fee.
Generally, you will need to get the right business licenses in place before you can apply for an EIN. However, if you’re running a business that doesn’t require a business license, you don’t need to worry about that step.
An EIN is critical for all types of business functions, but you don’t have to spend a lot of money on this number. We’ll help you obtain the number quickly and easily without breaking your budget. Apply today.