A tax identification number is necessary for paying federal taxes and conducting other business activities. It's a distinct code that tells the government who you are and how to track your tax obligations. While this unique identifier goes by different names depending on your location, including Employer Identification Number (EIN), federal Tax ID Number (TIN), or Federal Employer Identification Number (FEIN), the concept remains the same.

Tax ID numbers are used by large corporations, mom-and-pop shops, e-commerce businesses, non-profits, and even some freelancers. A tax ID number can protect your personal information, help you secure business credit, and make it easier to hire staff or work with certain vendors.

What's in this article?

• What is a tax ID number, and why do you need one?
  
• Who needs a tax ID number?
  
• How can you apply for a tax ID number?
  
• Tax ID application methods at a glance
  
• What documents do you need to get a tax ID number?
  
• How long does it take to receive a tax ID number?
  
• What are common issues during the application process for a tax ID?
  
• How Stripe Tax can help
  

What is a tax ID number, and why do you need one?

A tax ID number is how the government identifies your business. It tells tax authorities who you are when you pay taxes, file returns, and more. In the US, applying for a tax ID number such as an EIN is free, done through the IRS portal, and only takes a few minutes to complete.

Here's why you should obtain a tax ID.

To separate business from personal matters

If you operate as a sole proprietor, it can be tempting to use your Social Security number (SSN) or equivalent personal ID number. But doing so can blur the lines between your personal and business finances, which can lead to confusion when you do taxes or in the event of an audit.

To protect your personal data

Relying on your personal tax ID number can put your data at risk. By using a dedicated business tax ID number on invoices, vendor forms, and other paperwork, you limit how widely your personal identifier circulates.

To build your business's credibility

Having a tax ID number signals that you’re serious about your business. Some banks won’t allow you to open a business checking account without an EIN or local equivalent.

To comply with regulations

Hiring employees, working with contractors, and obtaining certain licences or permits often require a tax ID number. Without one, you might face red tape or penalties.

Who needs a tax ID number?

Many types of organisations need a tax ID number, including the following.

Businesses with employees

In the US, you must get an EIN if you hire staff, and other countries have similar requirements for their local tax IDs. The US government uses this information to track payroll taxes, unemployment insurance, and other employer obligations.

Businesses that operate as separate legal entities

If you form a limited liability company (LLC), corporation, or partnership, you generally need a tax ID to demonstrate that your business is a distinct entity.

Sole proprietors who want to manage business finances separately

Sole proprietors with no employees can use their social security number and are not required to have a separate EIN. But even if you run a one-person operation, applying for a dedicated business tax identifier can still be a smart decision since it can protect your personal information and offer access to business-specific benefits such as lines of credit.

Non-profits or charities

Organisations that file for tax-exempt status often need a tax ID to register with the government. This is standard procedure to verify their legitimacy.

Trusts, estates, or other specialised entities

Some non-business entities are also required to have tax ID numbers. In some places, estates and trusts require their own identifiers to file taxes or manage assets.

How can you apply for a tax ID number?

The process for obtaining a tax ID is usually straightforward, depending on local rules. Certain restrictions might apply if you're not physically located in the country where you're filing, so plan ahead if you're running an international operation. In the US, many entrepreneurs apply for an EIN through the Internal Revenue Service (IRS) website, with the process taking just a few minutes if you have the right details at hand. Here's how the application process works in the US.

1. Pick your official structure

You’ll need to state what type of entity the EIN is for (e.g., LLC, partnership) and why you’re applying. If you’re unsure, speak with a legal professional or accountant to guide you through the process.

2. Gather the other necessary details

In the US, the IRS requires the legal name of your business and any "doing business as" (DBA) names. You'll also need to apply using your business's mailing address and physical address, if you have one. Additional necessary details may include the date the business was started, and the closing month of your accounting year.

3. Submit the application

The EIN application, Form SS-4, can be completed and submitted online if your principal business is located in the US or a US territory. You can also apply by mail or fax, as well as by phone if you are an international applicant, although these methods typically take longer. It's worth noting that Form SS-4 was updated in 2025, and applications submitted with outdated forms will be rejected. Make sure to download the most current version of the form available.

4. Receive your tax ID

In the US, if you apply online and everything is in order, you'll receive your EIN instantly. Other methods can take up to four weeks. You'll receive a confirmation letter, called the CP 575 Notice, in the mail. The CP 575 is required to open business bank accounts. If it's lost, businesses can request a Letter 147C from the IRS.

5. Keep your new number safe

Once you have your ID number, store it in a secure place. You'll need to use it when you file business taxes, apply for business licences, and submit official forms.

Tax ID application methods at a glance

What documents do you need to get a tax ID number?

The exact requirements vary by country, but here’s a general list of what you will need to apply for a tax ID.

Personal ID

If you're the responsible party, expect to provide your government-issued identifier (such as your SSN or ITIN in the US). In some cases, you might need a personal taxpayer ID if you're not a citizen or resident.

Business registration info

If you’ve registered your business name or formed a legal entity, have those documents or registration numbers at hand. They verify your company exists and confirm its structure.

Postal address and contact details

You'll need to specify a place where official letters can be sent. This address might be different from your primary physical location (e.g., if you have official notices sent to a registered agent at a different address).

Nature of your business

Tax authorities will want to know what your organisation does, and you might need to select a category or code that reflects your primary activity. For example, if you run an online clothing store, you might select the retail or e-commerce category.

Date the business started

Some forms will also ask when your operation began or when you hired your first employee to confirm whether you’re at the right stage to apply.

Authorised signatory details

If you're not the owner but rather an executive or manager authorised to apply, your details might also be required to apply.

How long does it take to receive a tax ID number?

The time to receive your ID varies widely by region and by application method. In the US, applying online can get you your EIN immediately, while filing by post can take a few weeks. Other countries have their own timelines. Here are some examples:

• Businesses in Canada can register for a business number (BN) online and receive it immediately.

• Businesses in the United Kingdom are issued a Unique Taxpayer Reference (UTR) after they register. They typically receive it by post within 15 days.

• Businesses in Australia can apply for an Australian Business Number (ABN) online and receive it immediately.

• Businesses can apply for a New Zealand Business Number (NZBN) online and often receive it instantly, though some applications require a review taking up to three working days.

• Businesses applying for a German tax number (Steuernummer) through their local tax office usually wait two to six weeks to receive it by post.

If you have an urgent need for a tax ID, consider online or phone options to avoid paper handling and postal delays.

What are common issues during the application process for a tax ID?

While the process of applying for a tax ID is fairly easy to work through, certain issues can arise. Here are some common mistakes to avoid.

Providing incorrect or inconsistent information

A name or address mismatch between your application and official documents can lead to an immediate rejection. Before you file, verify that your information matches what you use on other official forms.

Choosing the wrong entity type

Choosing the wrong entity type – for instance, applying as a partnership when your business is an LLC – can confuse the system and lead to rejections or long processing times. If you're not sure which box to check, consult an accountant or business lawyer.

Encountering technical issues with online forms

Technical issues, such as the website crashing or the session timing out, can slow down your application. If you’re on a government website, clear your browser’s cache or try again during off-peak hours. Keep your details ready so you can re-enter them quickly, if needed.

Failing to follow application requirements

Businesses with foreign ownership might need to apply using different documents or paper forms. Every country has different rules about how non-residents can apply, so read the fine print and expect the process to take longer.

Applying repeatedly

If you try applying for a new ID multiple times, you might create warning signs for the issuing authority. The IRS limits EIN applications to one per day, regardless of application method. Instead of applying twice, it's best to wait for a response or contact the authority for help to confirm whether your first attempt was successful.

Falling for scam websites

Some sites charge fees to “help” you get a tax ID. The official process is typically free, so always confirm you’re on a legitimate government page or a recognised third-party service if you’re paying for assistance.

Not applying for a state-level ID

Most US states that have income or sales taxes also require businesses to register for a state-level tax ID separately. The process is similar to applying for a federal EIN, and many states issue a state tax ID immediately upon registration. You can learn more about state tax ID requirements and application processes on the SBA's website.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard or using our powerful API.

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• Digital goods and services in all US states and over 100 countries
  
• Physical goods in all US states and 42 countries
  

Stripe Tax can help you:

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• Register to pay tax: If you need to register for a sales tax in the US, let Stripe manage your tax registrations. You'll benefit from a simplified process that prefills application details – saving you time and simplifying compliance with local regulations. If you need help registering outside of the US, Stripe partners with Taxually to help you register with local tax authorities.

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• Simplify filing: Stripe Tax automates US filings in the Dashboard, powered by TaxJar. For global filings, Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business. US tax filings can be automated in the Stripe Dashboard, powered by TaxJar.

Learn more about Stripe Tax or get started today.