How Much Does an Federal EIN Number Cost?

Written by: Staff

An EIN, also referred to as an Employer Identification Number, is given by the Internal Revenue Service to businesses in the United States.  Each citizen of the United States is identified by the government by a social security number, and in the same way, the EIN identifies each business operating within the United States.  This EIN will also be nine numbers and will be used in the same ways a social security number is used — to open a bank account, credit card and file your tax return.

An EIN makes it easier to for the government to link a business to its tax history, credit lines and their financial records. This number is also used by banks or other lending institution to determine the credit history of a business.

Numbers And Finance by reynermedia, on Flickr
Numbers And Finance” (CC BY 2.0) by reynermedia

How much does an EIN number cost?

According to the IRS, obtaining an EIN is completely free as long as you have a social security number.  Unless you use a professional service to assist you or need a lawyer in the case of foreign owners, you won’t have to pay a dime if you do it on your own.  The EIN is free in all 50 states.

Some professional services, if you were to use one to open a new business, could charge a small fee, usually around $50 to $100., for instance, says some services could charge you $75 to file an EIN.

Since you need a social security number to file for an EIN, foreign owners of a new company in the United States will face a tougher process.  According to Dana Shultz, you will need to retain a lawyer or qualified individual to act as a third party designee.   This designee, in turn, will have to prepare the Form SS-4 and Form 8821 for the business president to sign and return.  Lastly, the form will be faxed, and the number will arrive in about one week.  Foreign owners often have to pay $500 to $1,000 to have a lawyer assist them with the process.  Dana Shultz, for instance, charges $500.

EIN number overview

To apply for an EIN, the IRS offers four options to receive your number:  you can apply online, by fax, by mail or by telephone.  If you file online, an EIN will be issued immediately once all of the information is validated.  If applying by fax or mail, applicants will need to fill out a completed Form SS-4 to the fax number or mailing address on the form.  When faxed, it can take up to four days to receive your EIN, or if by mail, it can take up to four weeks as long as the forms are filled out appropriately.  If you don’t have a social security number, then your forms must be faxed or sent over the phone.

Tips to know:

Do I need a new EIN?  If you already have an EIN, don’t apply for a new number.  The IRS recommends you call their offices to receive your number over the phone once they verify your identity.

Effective May 21, 2012, the IRS will only issue one EIN per responsible party per day to ensure equitable and fair treatment among taxpayers.

A Federal tax number, also known as an EIN, 95 Number or Tax I.D. Number, all refered to the same nine digit number issued by the IRS.

 How can I save money?

Filing an EIN is extremely easy.  As noted above, all you have to do is download the form or apply online to receive your number.  Don’t fall for the marketing tactics some companies use saying it can cost money to file an EIN.

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