Whether you’re a small or medium-sized business, you’ve likely been asked about an Employer Identification Number or EIN. It’s a unique Tax ID number used by the IRS to identify businesses, but not every company is required to have one. Most sole proprietors can just use their Social Security Number when asked to provide an EIN.

So you might wonder, why should you bother to get an EIN if it’s not required by the IRS?

The short answer: Having an EIN for your business has benefits AND it’s easy — it only takes about 10 minutes to get one online! Tax purposes aside, here are the Top Three Reasons you and your business could benefit from an EIN:

Makes Getting Business Accounts Easier

Having an EIN shows the world your company is being acknowledged by the IRS as a working entity in the U.S., and that official recognition is needed at your bank if you want to set up a business account or get a credit card for company use.

Also, you may need an EIN to apply for certain business licenses and permits, or to issue a 1099 tax form to an independent contractor.

Increases Security from Theft

An EIN is a simple way to add a layer of security to your business (and your family) – because you can use it instead of providing your Social Security Number (SSN) when doing business with utilities, vendors or customers – lessening your exposure to identity theft.

It’s increasingly important to keep your SSN private as the number of identity theft cases continues to rise — about 16.7 million people were affected by ID theft in 2017. When stolen, your SSN can be used to file fraudulent tax returns and get tax refunds – and can open the door to your other personal financial information.

Legitimizes Your Business

If you work as an independent contractor, an EIN can make you more attractive to prospective clients. You can always use your SSN to get paid, but having an EIN can reinforce to clients your legitimacy as a business person. It may also affect how clients see you and win you more contracts.

How to Get an EIN – Now

It only takes about 10 minutes to get an EIN when you apply online with the IRS. Your number will be issued immediately after completing the application – and you’ll be able to download, save and print your EIN confirmation.

Just a heads-up: The online application process is smoothly guided, but the system will make you start over if there’s any inactivity for more than 15 minutes. So be sure to have your information handy before beginning, such as knowing the legal structure of your business.

More Info

If you’re just starting a new business and aren’t sure whether you are required to have an EIN, learn more from the IRS here or check out FAQs about EINs. If you prefer to apply by mail, fax or phone, see the IRS info on How to Apply.