Businesses and other entities utilize what is known as an EIN, or employer identification number. This number is used for filing taxes, payroll, applying for loans, credit cards and banking. An EIN is generally nine digits long. While a social security number is also nine digits, it is written in the following format: three numbers, dash, two numbers, dash, and four numbers (XXX-XX-XXXX). AN EIN is formatted differently to distinguish it: two numbers, dash, followed by seven numbers (XX-XXXXXXX).
Identifying the Issuing Agency
EINs issued prior to 2001 utilized a numbering system wherein the first two digits indicated the geographical area in which the tax ID was issued. In 2001, the IRS centralized the assignment of all EINs, so this prefix does not have the same function as it once did. However, some EIN centers still have a dedicated prefix, as do EINs assigned online or through the Small Business Administration. Most businesses will find that the prefix numbers do not mean anything to them, as it does not generally matter which IRS agency assigned your EIN.
Using Your EIN
When you write your EIN on an application or another document, it is essential that you do so with the right format: XX-XXXXXXX. If you do not, it could create problems down the line as you try to conduct business. It might lead to confusion or inaccurate records. Most documents made for businesses will have a prefilled space that follows the correct format. However, some documents simply have an empty space, since businesses or individuals might use a different type of tax ID instead of an EIN.
Simple EIN Application
Every business must have a unique identifying number. Sole practitioners might be able to use their social security number, but most businesses must have an EIN. At IRS-EIN-Tax-ID Filing Service, we streamline the EIN online application to make it easier for you. Start your EIN application here.