A nine-digit tax ID number issued by the IRS that identifies your business for tax purposes — required to open a business bank account or hire employees.
An EIN (Employer Identification Number), also called a Federal Tax Identification Number, is like a Social Security number for your business. The IRS assigns it when you apply, and you use it to file business tax returns, open business bank accounts, apply for business licenses, and set up payroll.
You need an EIN as soon as you form any legal entity (LLC or corporation), and you'll also need one if you hire employees, even without an entity. Sole proprietors without employees can use their personal Social Security number, but getting an EIN is generally recommended because it keeps your business separate and avoids giving your SSN to vendors and clients.
Applying for an EIN is free and takes about five minutes at IRS.gov. You fill out Form SS-4 online and receive your EIN immediately. You'll want to do this right after forming your entity — it's one of the first things you need before you can open a business bank account or take on your first client formally.