EIN
A federal tax ID, also known as an Employer Identification Number, is a unique number assigned to your business by the IRS. A business uses its federal tax ID much like a person uses a Social number.
Bank usually ask for a federal tax ID before opening a business bank account or line of credit.
Sole proprietors may use a federal tax ID to help keep their own Social Security numbers private.
Who needs a federal tax ID?
The IRS requires most business entities to use a federal tax ID (EIN)—corporations, partnerships, most LLCs, and some sole proprietorships. A federal tax ID offers other benefits, even when it isn't required by the IRS. For instance, it can help protect against identity theft, and it's often a prerequisite for opening a business bank account.