EIN-Employer's Identification Number

Employers use their EIN-Employer's identification number to file tax returns showing the amount of withholding taxes they withheld. EIN's appear on Form 941, Form 940 and tax returns showing annual wages for employees, Form W2. These separate tax returns are filed using the employers EIN or Employers identification number.

The EIN, employer identification number, is a nine-digit number that the IRS assigns to business entities such as Corporations and Partnerships. A sole proprietor usually does not need an EIN until he has employees because he uses his social security to file his income taxes.

IRS Form S-4 is used to apply for an EIN. You can download this form from the IRS website and mail it or fax it to the IRS or you can apply for it online at the IRS website .

Payroll, payroll taxes and workers compensation are facts of life for businesses with employees.  While employees may be absolutely critical to the success of your business, they consume valuable resources that increase your cost of doing business. Make a mistake in calculating payroll withholding taxes and/or paying payroll taxes and you have angry employees and the IRS to deal with.

As you proceed with your business planning, you would be wise to consider purchasing a payroll software program to help process your payroll. Take a look at our payroll software program page to get an idea what types of features and reporting capabilities are important before you buy.