9 Benefits of EIN number

Furthermore, you might be aware of or consider the benefits of an employer identification number because it completely helps you separate your personal finances from your business finances. As well, it keeps separating your personal life from your business. Have all the benefits of the EIN number here.

Also, the employer identification number is a very important key to simplifying your accounting and bookkeeping. So, there are some relevant or preferable benefits that you can grab by having an EIN number for your business. 


 

1. File business taxes and avoid tax penalties

As of now, we have discussed that there might be certain kinds of businesses that would need an employer identification number to file their taxes. So, the first benefit is that EIN provides you with the ability to avoid tax penalties as well as conveniently file your business taxes without wasting your time.

2. Prevent identity theft

There is another benefit to knowing which you might be surprised because the EIN number is an effective way to prevent identity theft. As well, there is no need to provide your social security number to clients or vendors who are doing business with you. So, rather than providing your SSN number, you can conveniently provide your EIN number to them. 

3. Add credibility as a freelancer or independent contractor

Having an employer identification number adds more credibility to your business if you are working as a freelancer or independent contractor. Because one client can make a big financial difference. Furthermore, if you have a business tax ID, it proves that you are an independent contractor. Also, it would be more attractive to different companies who would be willing to hire you for their businesses. 

4. Speed up business loan applications

Along with this, when you are ready to apply for a business loan, the EIN will help you to speed up your business loan applications. Also, EIN will be helpful for having some business permits and licenses to make your business legally qualified. You can have your own EIN number if you have an EIN number. So, it would be feasible for you to apply for the loan as soon as possible without wasting your time. 

5. Open a business bank account

It would be beneficial for you to have an EIN when you are opening a business bank account. But there are some proprietors who are allowed to open a business bank account without having an employer identification number. Similarly, they would have to follow some other stricter policies for opening their business bank accounts.

Most importantly, there will be a need to provide a few other documents when you are opening your business account. Because it would need your business information, your business location, as well as your personal information, along with the legal business name that should be mentioned there about the owner. Also, you need to make sure that only the transition is taking place for business purposes, whether money is coming into your account or going out of your account. 

6. Build trust with vendors

As a small business owner, you would have to rely on vendors or suppliers and partnerships with other businesses. Because it’s not possible to do everything by yourself to achieve your goals. But, when you have an employer identification number, your chances become higher of letting other companies know about you to work with your business. 

In addition to this, if you have an employer identification number, it shows your business credibility. Also, it shows that you are a responsible person who will be liable for paying all the payments to the vendor on time. 

7. Establish business credit

Your employee identification number will be the key to establishing a business credit card history for your business. Also, this history is completely similar to your personal credit history. Having a good business credit history evaluates your company’s history of every bill payment and financial responsibility you have. 

8. Easily hire employees

When your business needs to hire employees, at that moment, you would absolutely need an EIN. Completely, it would be required for your business to have an EIN when you are planning to add more employees to your business. Having an extra set of hands to help promote your business, getting an EIN won’t hurt. Also, the employer identification number will help you to set up a payroll system without any further delay. 

9. Get more options as an overseas entrepreneur

For starting a business, an EIN can be helpful. This would be required if you are not a US resident without having a social security number. In addition to this, when there are foreign nationals, they can apply for an EIN number by contacting the IRS authorities. Even with an EIN, you would be able to have your business credit card or you can conveniently open your business bank account.

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