What an EIN Is — and Why You Need One

An Employer Identification Number (EIN) is a 9-digit number the IRS uses to identify your business for tax purposes. Think of it as a Social Security Number for your business.

You need an EIN:

• To open a business bank account (most banks require it)
• To fill out a W-9 when a client or platform requests it
• To receive a 1099 from any platform that pays you over $600/year
• If you ever hire anyone — even part-time
• To apply for a business credit card or loan
• On most government business applications

Even if you are a sole proprietor with no employees, get an EIN. It keeps your SSN off every business form and adds a layer of identity protection. It costs nothing.

How to Apply — Step by Step

1. Go to IRS.gov and search “EIN Online Application” — go directly to the IRS site, not a third-party service. Do not pay anyone for this — it is free from the IRS.
2. Click “Apply Online Now” — the application is available Monday–Friday, 7am–10pm EST.
3. Select your entity type (Sole Proprietor, LLC, etc.)
4. Answer questions about your business — purpose, structure, and whether you have employees. For a home bakery, select “Started a new business” as the reason.
5. Enter your business name and address exactly as registered.
6. Submit — you’ll receive your EIN immediately on screen. It also arrives by mail in 4–6 weeks.

Save your EIN immediately in three places: Tab 5 of your binder, a secure digital document, and your business email’s drafts folder. You will use it repeatedly and cannot lose it.

Common Mistakes to Avoid

• Using a third-party service: Websites charge $50–$200 to do what takes 10 minutes on IRS.gov for free.
• Applying before your LLC is formed: If you’re forming an LLC, apply for the EIN after your LLC is officially registered with the state — not before.
• Losing the number: If you lose your EIN, you can call the IRS Business & Specialty Tax Line (1-800-829-4933) to retrieve it. But save it correctly from the start.