Key Takeaways

  • Registering a business with the IRS requires obtaining an Employer Identification Number (EIN), even for some sole proprietors.
  • You can apply for an EIN online, by mail, fax, or phone (for international applicants).
  • Registering your business at the state level and obtaining the appropriate licenses and permits is also essential.
  • Choosing the right legal structure (LLC, corporation, sole proprietorship) impacts your IRS registration and tax obligations.
  • Registering for additional IRS-related programs such as excise taxes or payroll taxes may be necessary depending on your business activities.

IRS business registration involves applying for an Employer Identification Number (EIN). In addition to allowing the IRS to track the activities of your business, your EIN will allow you accomplish important tasks such as hiring employees and opening a business bank account.

Register with the IRS

Obtaining an EIN formally registers your business with the IRS. Although acquiring this number isn't the first step in starting your business, it is one of the most important.

If you are the sole proprietor of a small business, you don't necessarily need an EIN. That said, applying for this number can be very advantageous, and already having this number will make it much easier to expand your company. Should you decide not to apply for an EIN, you can use your Social Security Number to pay your business taxes.

Several types of business entities are legally required by the IRS to have an identification number:

  • Corporations
  • Limited liability companies
  • Partnerships

There are a few other issues that may require you to obtain an EIN. For example, if your business withholds taxes for income that doesn't count as wages, you'll need an EIN. You will also need an EIN if you file an employment tax return or excise tax return. One of the biggest benefits of having an EIN is that it will make it easier for you to keep your business finances and personal finances separate.

Choosing a Legal Structure Before IRS Registration

Before you register your business with the IRS, you must decide on a legal structure. This choice affects your tax obligations, registration requirements, and personal liability. Common structures include:

  • Sole Proprietorship: Simple to set up; you may use your Social Security Number if an EIN is not required.
  • Partnership: Requires an EIN if there are multiple owners.
  • Limited Liability Company (LLC): May need to file as a corporation or partnership for federal tax purposes.
  • Corporation (C Corp or S Corp): Must obtain an EIN and comply with additional tax filing requirements.

Selecting the appropriate structure ensures that your IRS registration aligns with how you plan to operate and grow your business​​.

How to Get Your EIN

There are several different ways that you can obtain your EIN from the IRS. First, you can apply for your tax ID via fax. You can complete Form SS-4 with the appropriate information and then fax the form directly to the IRS. The IRS will review your form and will determine if you actually need an EIN. If the IRS decides that your business does need a federal tax ID number, they will assign you a number based on your entity type.

If you include a return fax number on your application, the IRS will fax your EIN in 4 business days. It is also possible to acquire an EIN by mail. You should be aware that if you file by mail, you will need to wait four weeks after your application gets approved before you will receive your ID number.

Before mailing in your application, make sure that you've included the correct information on Form SS-4. As with fax applications, the IRS will examine the information you have provided to make sure you actually need an EIN. If you live somewhere other than the US and wish to obtain an EIN for your company, you can call 267-941-1099 to acquire your tax ID. This number is available from 6 a.m. to 11 p.m. from Monday to Friday.

When making this phone call, you should be sure that you have authorization to provide the information required on Form SS-4 and that you have authorization to receive an EIN.

Online EIN Application Process

The fastest and easiest way to register your business with the IRS is through the IRS EIN Assistant, available online Monday through Friday from 7 a.m. to 10 p.m. ET. The process includes:

  1. Accessing the IRS EIN Assistant at irs.gov.
  2. Completing Form SS-4 online with details such as your business structure, ownership, and address.
  3. Submitting your application and receiving your EIN immediately if approved.

Note that only U.S.-based applicants with a valid taxpayer identification number can use the online EIN application tool​.

Register with Your State

After you have completed IRS business registration, you need to register your business with the tax authorities in your state. Your business will likely need to fulfill tax obligations at both the local and state levels, even if your business operates only online. Every new business needs to register with their state revenue office. Before you can collect sales tax, you may need to apply for a permit.

When State Registration Is Required

In most states, businesses must register if they:

  • Operate under a trade name or DBA (Doing Business As).
  • Hire employees.
  • Sell goods subject to sales tax.
  • Are formed as a corporation, partnership, or LLC.

Some states also require registration with the secretary of state, even if you’re operating solely online or as a sole proprietor. Failing to register with your state can result in penalties or restrictions on doing business​.

Getting Business Permits

Before you start offering goods or services to customers, you should be certain that you've obtained the correct permits and licenses for your business. Even e-commerce business, or business that you operate out of your home, must be licensed in certain jurisdictions.

Depending on the location of your business, you may need to contact several government agencies and complete a large volume of paperwork. If you can cover the expense, you may want to hire an attorney to help you with this paperwork. With professional help, you'll be able to quickly fill out your applications and receive your permits sooner.

To find out what different permits and licenses you need, you should call the office of your county clerk or the permitting office in your city. You can also visit the Small Business Administration (SBA) website, where you can find a tool that will help you search for permits and licenses.

Additional IRS Registrations to Consider

Depending on your business activities, you may need to register for additional IRS programs beyond your EIN:

  • Excise Taxes: Required for businesses selling fuel, tobacco, firearms, or other regulated goods.
  • Employment Taxes: If you plan to hire employees, you must set up federal payroll tax accounts to manage Social Security, Medicare, and income tax withholdings.
  • Nonprofit Organizations: Must apply for tax-exempt status using IRS Form 1023 or 1024 after obtaining an EIN.

Review your business’s operations to determine whether additional IRS registrations apply​​.

Frequently Asked Questions

  1. Is getting an EIN the same as registering a business with the IRS?
    Yes. Obtaining an EIN is the primary method of registering your business with the IRS for tax purposes.
  2. Can I use my Social Security Number instead of an EIN?
    Sole proprietors without employees can use their SSN, but obtaining an EIN is often recommended for liability and banking purposes.
  3. How long does it take to get an EIN?
    Online applications are approved immediately. Faxed applications take about 4 business days, and mailed applications can take up to 4 weeks.
  4. Do I need to register my business with both the IRS and my state?
    Yes. IRS registration covers federal taxes, while state registration ensures compliance with local tax and legal requirements.
  5. Can international applicants get an EIN?
    Yes. International applicants must apply by phone by calling the IRS at 267-941-1099 (not toll-free), Monday through Friday.

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