What's an EIN?

The Employer Identification Number (EIN), also called a Federal Tax ID Number, is used to identify a business entity so that the Internal Revenue Service can keep track of the funds paid to and from the business, and thus ensure that the business is paying the appropriate taxes each year, if required. An EIN is to a business what a Social Security Number (SSN) is to a natural person. 

Because of federal reporting regulations, every firm that pays you funds will have to report them to the IRS using your EIN. Likewise, your bank, accountant, credit card issuer, payment processor and any state in which you will file for Foreign Qualification will also need to know and report your EIN.