- [Instructor] Employer Identification Numbers,
or EINs, are the first step
in becoming a more professional business.
These days most firms have to record and report
major payments they make to other parties,
and that means unless you have an EIN,
you're going to have to give out
your social security number a lot.
For instance, if you operate a construction firm
supplying carpet installation, you'll have to either
give every builder you work for your social security number
or give them an EIN.
The EIN avoids the risks associated
with having lots of people know your social security number.
You will also need an EIN in order to set up
a business banking account.
So let's take a look at how you can get
an EIN for your firm.
Now, I'm here at the IRS's website
for registration for EINs.
If you're not familiar with this site,
you can find it just by googling EIN registration.
So once we've done that, we're going to go through
and begin our application.
Now we need to choose which corporate
organization form we are.
Many businesses are going to be sole proprietors,
in other words, you're just in business for yourself.
You're probably the only employee, et cetera,
or only person working for the firm.
A few firms might be partnerships.
For example, law firms or real estate companies, et cetera.
Bigger companies will often be organized as corporations.
But probably the most common organizational form is the LLC.
LLCs are cheap and easy to set up.
So I'll select that one
and now we have to go through and confirm
that we know we're an LLC.
And from here, we're going to have to tell them
a little bit of information about the LLC.
All right, and we have to tell them
where we're physically located.
I'm just going to pick a state, Connecticut,
and there's only one member in the LLC.
From here, as is typical with all of the IRS forms,
you're going to have to confirm a lot of different information.
And we continue on.
So now we say we are going to start a new business.
And from here, we'll have to go through
and authenticate who's responsible for the LLC.
Okay, so now we need to authenticate ourselves.
We need to put in our information
for the purpose of letting the IRS know who we are.
So I'm going to go ahead and put in my social security number.
And we're ready to continue now.
So we have to put in where the business is located.
So we'll say 123 Main Street
and this is in Anytown,
Connecticut, and we'll just say it's 06484.
And now let's say, from here
we're going to put in our phone number.
So because I entered a fictional physical address,
we are not going to be able to find that,
but I'll say accept it as entered.
Okay, so now we need to put in the legal name of our LLC.
I'm going to say that it's Any LLC.
We've got our business name, the county
where we're doing business,
so let's just say that that's Fairfield.
And the state where we're doing business,
and the state where we're organized.
And our start month and date.
And we'll continue.
It's going to ask a variety of questions.
Most of the time the answers are probably going to be no
unless you're in kind of a specialized business.
The only exception to this is the last question.
Do you have any employees?
Do you expect to have employees?
For most businesses, or for many businesses,
the answer is going to be yes, all right.
So we're going to go through and continue.
And then finally they want to know
when do we start paying these guys.
So they want to know the total number of employees
that we're going to have.
We'll just say one, and we'll say
that our employment tax liability is going to be
less than $1000, for most businesses it'll be more.
It's not a big difference either way, though.
All right, and so now they want to know which category
is going to be our business.
I'll pick construction.
And we'll continue.
And then it wants to know specific questions
related to our industry.
And so I'll choose answers kind of at random here.
They want to know when we get done,
how we want to receive our confirmation letter.
Letters are easier to receive online.
And once we're done, we hit continue
and that will finish out the EIN process.
Now you know how to apply for an EIN on your own.
You've seen that it's relatively easy to get started
and minimize the work and risk
associated with business taxes.
Remember, you'll likely want to set up a separate LLC
for each business entity, and that means
you'll probably want separate EINs
both for tax reasons and liability reasons.