What is an EIN?
SHORT ANSWER
An EIN (Employer Identification Number) is your business's federal tax ID number, issued by the IRS.
It identifies the business to the federal government the way a Social Security number identifies a person. Applying is free and is done directly with the IRS.
Banks ask for it to open a business account. Suppliers ask for it on credit applications. Payroll and most tax filings require it.
For example
You form an LLC, apply for an EIN with the IRS, then use that number to open the business bank account.
Why it matters
Without an EIN you end up running business money through personal accounts, which blocks credit, terms and clean books.
The mistake to avoid
Paying a third-party site for an EIN. The IRS issues it at no cost.
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LAST UPDATED 2026-09-16 · REVIEWED BY REGISTIX OPERATIONS TEAM