When to register for an EIN for your online business
An Employer Identification Number (EIN), sometimes called a tax ID number, is basically a Social Security number for your business.
Whether you need one doesn’t depend on how much you earn or whether your business is full-time or part-time — it depends on your business structure.
When You Need an EIN:
• LLC
If you register your business as an LLC, you’ve created a separate legal entity*. Because of that, you should get an EIN. You’ll need it for opening a business bank account and if you hire employees in the future.
• S Corporation or C Corporation
If you elect S corporation status or form a C corporation, an EIN is required.
• Sole Proprietorship
If you’re operating as a sole proprietor, you’re allowed to use your Social Security number.
However, most business owners prefer to apply for an EIN so they aren’t sharing their SSN on W-9s and 1099s.
• Sole Proprietorship with Employees
If you have employees (W-2 employees**), or you file excise taxes or have a pension plan, you must apply for an EIN.
You can apply for an EIN by filling out an SS-4 online with the IRS at www.irs.gov.
How EINs Connect to Your Bigger Tax Responsibilities
This is the part a lot of new business owners miss:
➡️ Getting an EIN isn’t the end of your tax setup — it’s the beginning.
Once you know your business structure and whether you need an EIN, the next step is understanding the main tax responsibilities that come with running a business. These include:
- Income tax (federal + state)
- Self-employment tax
- Quarterly estimated taxes
- Sales and use tax (possibly, depending on your state and what you sell)
Your EIN simply tells the IRS which business is responsible for those taxes — but it doesn’t tell you how to handle them. And that’s where most business owners feel confused.
If you’re not sure what taxes apply to you (or what order to handle them in), I created a guide that breaks it down without jargon or stress.
It walks through the 3 layers of taxes you’ll deal with, the first steps to get tax-ready, and the common mistakes new business owners make.
👉 Download the free guide: The Tax Basics Every New Business Owner Should Know
Want to Make Quarterly Taxes Less Confusing?
If you’ve already sorted out your EIN and basic setup but still feel unsure about things like:
- How much to set aside
- Whether you owe quarterly taxes
- How to calculate quarterly payments correctly
- How to avoid surprise taxes in April
…then my course, Know What You Owe, Your No-Panic Tax Plan™, walks you through it step-by-step using short, friendly videos and simple worksheets.
👉 Learn more: Know What You Owe, Your No-Panic Tax Plan™ — Your Step-By-Step System for Quarterly Taxes
* If you are the only owner of your LLC and are filing your taxes that way, you’re considered a disregarded entity. Megan, why the jargon? This terminology is important when you are registering for the LLC’s EIN with the IRS (say that three times fast)!
** Employees you pay wages to and withhold payroll taxes from. This isn’t referring to independent contractors you pay.
