How Much Does It Cost to Get an EIN?

How Much Does It Cost to Get an EIN?

By HSBU

Obtaining an Employer Identification Number (EIN) is a crucial step for any business operating in the United States. An EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses for tax filing and reporting purposes.

While the process of getting an EIN is straightforward and free when done directly through the IRS, there are various costs associated with consulting professionals, using expedited services, and obtaining assistance from third-party services. This blog will explore all aspects of the costs involved in obtaining an EIN, providing you with a comprehensive understanding of what to expect.

What is an EIN?

Definition and Purpose

An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is used to identify a business entity. It is required for various business activities, including opening a business bank account, filing tax returns, and hiring employees.

Why You Need an EIN

  • Tax Reporting: Essential for filing business taxes.
  • Business Banking: Necessary for opening business bank accounts.
  • Hiring Employees: Required for payroll and employment tax purposes.
  • Business Identity: Establishes a unique identity for your business.

How to Get an EIN for Free

Directly Through the IRS

The most straightforward and cost-effective way to obtain an EIN is to apply directly through the IRS. This can be done online, by fax, by mail, or by phone (for international applicants).

Steps to Apply for an EIN

  1. Determine Eligibility: Ensure your business is eligible for an EIN.
  2. Prepare Information: Gather required information such as your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
  3. Submit Application: Complete the application online, by mail, fax, or phone.
  4. Receive EIN: The EIN is issued immediately for online applications and within four weeks for mail applications.

Additional Cost To Get an EIN

Consulting with a Tax Professional

Overview

While obtaining an EIN from the IRS is free, many business owners seek the assistance of tax professionals to ensure accuracy and compliance with tax laws.

Costs

  • Consultation Fees: Depending on the complexity of your business structure, consultation fees can range from $100 to $500.
  • Benefits: Professional advice can help avoid mistakes and ensure all necessary steps are completed correctly.

Expedited Services

Overview

If you need your EIN quickly, some third-party services offer expedited processing for a fee. This can be particularly useful for businesses on tight timelines.

Costs

  • Expedited Service Fees: Fees for expedited services can range from $50 to $200, depending on the service provider and the speed of processing.

Assistance from Third-Party Services

Overview

Various third-party companies offer assistance in obtaining an EIN as part of their business setup services. These companies can simplify the process but typically charge a fee for their services.

Costs

  • Service Fees: Fees for third-party assistance can range from $50 to $300.
  • Bundled Services: These services are often bundled with other business setup services such as LLC formation, which can increase the overall cost.

Bundled with Other Business Setup Services

Overview

Many business formation companies offer EIN acquisition as part of a package that includes LLC formation, registered agent services, and compliance assistance.

Costs

  • Package Fees: Comprehensive business setup packages can range from $100 to $1,000, depending on the level of service and additional features included.
  • Value: Bundling services can provide convenience and ensure all legal requirements are met.

Conclusion

While obtaining an EIN from the IRS is free, various additional costs can arise depending on the level of assistance and services you choose. Consulting with a tax professional, using expedited services, or opting for third-party assistance can increase the overall cost but may provide added convenience and peace of mind. By understanding these costs, you can make an informed decision that best suits your business needs.

Ready to get your EIN? Start by applying directly through the IRS for free. If you need additional assistance or expedited services, consider consulting a tax professional or using a reputable third-party service. For more tips and resources on setting up your business, subscribe to our newsletter and stay updated with the latest business insights.

FAQs

How long does it take to get an EIN?

If you apply online through the IRS, you can receive your EIN immediately. Mail applications can take up to four weeks.

Can I apply for an EIN if I’m not a US citizen?

Yes, non-US citizens can apply for an EIN. You’ll need to complete the application by phone or mail if you don’t have an SSN or ITIN

What information do I need to apply for an EIN?

You’ll need your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), and details about your business such as legal name, address, and type of entity.

Is it necessary to consult a tax professional to get an EIN?

No, it’s not necessary but it can be helpful. A tax professional can ensure the process is done correctly and provide additional business advice.