Quick Checklist: Do You Need an EIN?
You NEED an EIN if:
- You have employees (or plan to hire)
- You operate as a corporation or partnership
- You file employment, excise, or alcohol/tobacco/firearms tax returns
- You withhold taxes on income paid to non-resident aliens
- You have a Keogh plan
- You're involved with trusts, estates, or certain nonprofits
You DON'T need an EIN if:
- You're a sole proprietor with no employees
- You're a single-member LLC with no employees
- You use your SSN for all tax reporting
You SHOULD get an EIN anyway if:
- You want to protect your SSN privacy
- You need a business bank account
- You work with vendors who require it
- You might hire employees in the future
By Business Type
Sole Proprietor
Required? No (unless you have employees)
Recommended? Yes, for privacy and banking.
As a sole proprietor, you can use your SSN for everything. But sharing your SSN with every client and vendor is risky. An EIN gives you a business-specific number.
Single-Member LLC
Required? Only if you have employees
Recommended? Yes, and many banks require it.
Single-member LLCs are "disregarded entities" for tax purposes. You report business income on Schedule C with your personal return. But most business accounts require an EIN.
Multi-Member LLC
Required? Yes, always.
Multi-member LLCs are taxed as partnerships and must file Form 1065. An EIN is required.
Corporation (C-Corp or S-Corp)
Required? Yes, always.
All corporations need an EIN, regardless of whether they have employees.
Partnership
Required? Yes, always.
Partnerships must file Form 1065 and need an EIN.
Nonprofit Organization
Required? Yes, always.
Nonprofits need an EIN to apply for tax-exempt status (501(c)(3)) and to file required returns.
Freelancer / Independent Contractor
Required? No (unless you have employees)
Recommended? Yes, if you want to avoid sharing your SSN.
When clients send you a W-9 form, you can put your EIN instead of your SSN. This protects your personal information.
Common Scenarios
"I just started an Etsy/eBay/Amazon store"
Do you need an EIN? Not required, but recommended.
Online sellers are usually sole proprietors. You can use your SSN, but an EIN is better for:
- Opening a business bank account
- Separating business from personal finances
- Working with wholesalers who require a tax ID
"I do freelance work on the side"
Do you need an EIN? Not required, but helpful.
If you're receiving 1099s from multiple clients, an EIN lets you avoid putting your SSN on every W-9 form.
"I'm forming an LLC for asset protection"
Do you need an EIN? Depends on the structure.
Single-member LLC: Not required, but usually needed for banking Multi-member LLC: Yes, always required
"I inherited a trust or estate"
Do you need an EIN? Yes.
Trusts and estates that generate income need their own EIN for tax reporting.
"I'm starting a nonprofit"
Do you need an EIN? Yes.
You'll need an EIN before you can apply for 501(c)(3) tax-exempt status.
The Bottom Line
When in doubt, get an EIN. It's free from the IRS, takes minutes to apply, and gives you:
- Privacy protection (stop sharing your SSN)
- Easier banking (most business accounts require it)
- Professional credibility (clients and vendors expect it)
- Future flexibility (ready when you need to hire)
Ready to Apply?
We make it simple. Fill out our form, and we'll handle the IRS paperwork. Your EIN delivered in 24-48 hours.