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What is an EIN?

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Many sole proprietors start their businesses using their Social Security Number for tax and banking purposes. While this is allowed, it can expose personal information which is not ideal for small business owners. If you are a sole proprietor, applying for an Employer Identification Number (EIN) is a simple, free way to protect your privacy and give your business a more professional presence.

Why Should Sole Proprietors have an EIN?

An EIN is a unique nine-digit number given by the IRS to identify your business for tax purposes. It acts as the business's social security number and can be used on tax forms, bank accounts, and business licenses. Having an EIN allows business owners to protect their privacy by using the EIN in place of their social security number. An EIN can also simplify taxes and banking for your small business, as it is often required to open a business bank account or apply for business licenses. Even if you are the only person in your business, getting an EIN can help protect your personal information and help your business be more efficient as it begins to grow. 

How to Apply for an EIN

Applying for an EIN is free and can be done directly through the IRS website. Here’s how:

  1. Go to the IRS website and select the blue box “Begin Application Now.”
  2. Choose your business type: Select Sole Proprietor and confirm you’re the owner.
  3. Select your reason for applying for an EIN (starting a business, hiring employees, banking requirement, etc.)
  4. Provide your information: Enter your name, SSN, and business details (such as name, address, and reason for applying).
  5. Submit your application: Once complete, you’ll receive your EIN immediately if you apply online during IRS business hours.
  6. Save your EIN Confirmation Letter: Download and keep a copy for your records — you’ll need it for banking, tax filings, and future reference.















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