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hey this is attorney elizabeth potts-weinstein and today we're going to talk about do you need an e-i-n number for your online business here in the united states an ein or employer identification number is kind of like a social security number for a business it identifies the business to the irs so the irs knows how to find you and so you can fill out the various tax forms [Music] so here in the united states if you're a business who has employees who are in the u.s even if you're not located here if you're a business that has multiple owners or if you're a s corporation or a c corporation you're going to need an ein however if you're a business where you have no employees and you're a one owner business which could be a sole proprietorship or could be a one owner llc you don't need an ein but i highly recommend them so why do i recommend that every business in the united states or who works here in the united states get an ein the reason is is it costs you absolutely nothing except in very limited circumstances where you may need someone to help you but most people can do it themselves in most situations also it means that you're protecting your personal tax id number so if you have a social security number or an itin which is an individual taxpayer id number for people who are not citizens of the united states then you would have to be giving that social security number out to people all the time on your w-9 whenever they're needing to tax you in various other forms instead of keeping that information private if you have an ein then you give out the ein for your business instead of sharing your personal social security number [Music] so if you have an online business that's not physically located here in the united states you may still want to get an ein number and even form a business entity in the united states to handle the transactions with your u.s customers or clients what can happen is it can be difficult for people to pay you and for you to get that money if you don't have a banking relationship with some kind of bank in the united states and so it can make sense for you to form an llc here get an ein number set a bank account here so you can get paid so how do you get an ein number for your online business what you do is you fill out an online application at the irs website and you can do it yourself most people are not going to need to hire someone else because it's relatively straightforward and we're going to go through that the one situation where i recommend that you may need someone to help you is if you don't have a social security number or a tax id number with united states irs in that case getting a itin can be a bit of a headache especially if you're not physically located in the united states so i recommend that you hire someone to help you with that so now we're going to look at the actual application to get an ein so there's two ways you can do it one is a pdf that you fill out and send in to the irs and the second is an online application you can only do the online application under certain circumstances you have to be have your principal pace of business be in the united states you must have a tax payer payer identification number for the person who's doing the application so it's your social security number it's your itin your taxpayer identification number or it's an ein for another business so if you're a subsidiary of another business that already has the ein you can use that one otherwise you have to use the pdf form the great thing about applying online is if it goes through okay which doesn't always happen but if it goes through okay you'll get your ein immediately it'll be automated but if you have to do the pdf it takes sometimes weeks to get it back well right now we're in the middle of the coronavirus stuff so it may take way longer than weeks to get it back so first let's look at the ss4 which is the pdf form that to fill out and i'm going to talk about the various things that need to go in these boxes first you're going to have to have the legal name of the business so if an llc it's going to be let's say pots weinstein financial consulting llc which is the name of a business i used to have trade name of the business is like a dba so let's say i the name of my business was potts weinstein consulting llc then the dba might be something like the name of my website or the name of a different project i have under it you may not always have this you're going to need to fill out the address and city state all those kinds of basic pieces of information and then you're also going to need to put the responsible party so there needs to be one human person or another company who is responsible for tax communications with the irs and that's what you're going to put here if it's an llc you talk about is this for an llc or of course and then also the number of llc members so if it's a one-person llc you would just put the number one you're also gonna have to specify the type of legal entity so for a lot of you who are starting a business you're going to be a sole proprietor which means you are one person and you haven't formed any legal entities a partnership which is two or more people who are going into business together but they haven't formed any entities or you're going to be an llc or corporation there's also a bunch of other reasons you may need to get an ein such as for non-profit organizations and such and estates so those are here if that applies to you you're also going to need to tell them why you're applying for this such as if you start a new business and when you started a new business when this business originally started for a lot of you it's going to be because you started a new business but for some of you maybe you started this business a long time ago and now you're finally adding employees and so now you're getting your eim the reason they ask about employees is because if you do have employees they're going to send you more paperwork to fill out about employees but for some of you you don't have employees and you don't need that stuff you're also going to need to tell them the principal activity of your business so if you have an online business where you're selling products online for example then you have a retail business so you would check retail and then the principal line of business in that is selling goods via the internet something like that and then you need to sign this by the way you are signing this under penalty of perjury that means it is illegal if you have said anything that's not true on this application so make sure you verify and get everything right the second page of the pdf which i'm going to link below in the comments has a nice chart to help you figure out if you need an ein there are some very particular situations that may not apply to you such as creating a trust or a pension plan you know things like that that are addressed here so looking at the online application the online application is pretty much the exact same thing except they ask you just piece at a time if you can use the online application i highly recommend doing it because the online application you get the ein immediately now one thing i want to make sure is that you are on irs.gov when you do the online application if you just google getting an ein online or something like that a whole bunch of other websites will come up that are not the irs you're giving your information to some random website and they're going to probably charge you money to get your ein but applying for your ein online is totally free if you do it directly through the irs if you decide to apply on the irs's website when you hit apply online it goes to a different subdomain of the irs's website it has a pop-up saying you can only use this for authorized use and then every single screen gives you more information and leads you through the various steps if for some reason you do the application online and you get to the end and it doesn't give you the ein right then there may be something technically wrong with your application for example maybe you actually already have an ein and you forgot that you have an ein or maybe you've mistyped your social security number or your social security number doesn't match up with your legal name in the application there's probably some technical problem that's wrong that the algorithms over at the irs are rejecting your application for and in that case you may need to call the irs to figure out what's wrong such as if you already have an ein and you're actually wasting your time you just forgot it or if they're going to tell you that you have to use the pdf application again this is attorney elizabeth potts-weinstein if you have any questions about applying for ein or whether it makes sense for you you can go ahead and leave them below feel free to hit the like button if you found this helpful and subscribe if you'd like more legal tips for your online business thanks a lot you guys [Music]