Quick answer
Most sole proprietors are not required to have an EIN. If you work alone, have no employees and don’t file certain federal tax returns, you can use your Social Security number (SSN) for your business.
But most freelancers should get one anyway. An EIN is free, takes about 10 minutes online, and lets you give clients a business number instead of your SSN on every W-9. Banks, payment platforms and Solo 401(k) providers often ask for one too.
What is an EIN?
An Employer Identification Number (EIN) is a nine-digit number (format: 12-3456789) that the IRS assigns to identify a business for tax purposes. Think of it as a Social Security number for your business.
Despite the name, you don’t need employees to get one. Sole proprietors, LLCs, corporations, partnerships, nonprofits, trusts and estates all use EINs. It’s also called a Federal Employer Identification Number (FEIN) or Federal Tax ID Number.
When a sole proprietor must have an EIN
According to the IRS, you must get an EIN if any of these apply to you:
- You have employees, even one part-time worker.
- You file employment, excise, or alcohol, tobacco and firearms tax returns.
- You withhold taxes on income, other than wages, paid to a nonresident alien.
- You have a Keogh plan (a tax-deferred retirement plan for the self-employed). In practice, most Solo 401(k) providers also ask for an EIN.
- You operate as a partnership or corporation, or form a multi-member LLC.
You’ll also need a new EIN if you change your structure, for example by incorporating or taking on a partner. A single-member LLC without employees isn’t always required to have one for federal income tax, but banks and state agencies almost always ask for it, so treat it as required.
If none of these apply, an EIN is optional and you can report everything under your SSN on Schedule C.
| Your situation | EIN required? |
|---|---|
| Freelancer or 1099 contractor working alone | No, but recommended |
| Gig worker (Uber, DoorDash, Instacart) | No, but recommended |
| Sole proprietor who hires an employee | Yes |
| Sole proprietor with a Keogh or Solo 401(k) plan | Yes (Keogh) / usually requested (Solo 401(k)) |
| Single-member LLC with no employees | Usually requested by banks and states |
| Multi-member LLC, partnership or corporation | Yes |
Should you get an EIN if it’s optional? Pros and cons
Pros
- Protects your Social Security number. Every client who pays you asks for a W-9. With an EIN, your SSN isn’t sitting in dozens of client files and inboxes, which reduces the risk of identity theft.
- Looks more professional. A business tax ID signals that you run a real business, not a side gig.
- Makes banking easier. Many banks require an EIN to open a business checking account, and some payment processors and marketplaces request one.
- Needed for retirement plans. Most Solo 401(k) providers ask for an EIN to open the plan.
- Ready for growth. If you hire your first employee, the number is already in place.
- It’s free and fast. There’s no cost and no ongoing obligation for a sole proprietor.
Cons
- One more number to keep track of. You’ll need to use it consistently with clients and banks.
- It doesn’t replace your SSN on your own tax return. You still file Form 1040 with your SSN, and the EIN only appears on business forms.
- No legal protection. An EIN doesn’t create a company or protect your personal assets. For that you need an LLC. See Sole Proprietorship vs LLC for Freelancers.
- It stays open. The IRS never reuses an EIN; if you stop the business you can ask the IRS to close the account.
Our verdict: for almost every freelancer and 1099 contractor, the SSN protection alone makes an EIN worth the 10 minutes.
How to apply for an EIN online (step by step)
The fastest way is the IRS online application. It’s free, and if approved you get your EIN immediately.
Before you start, have ready:
- Your Social Security number or ITIN (you’ll be the «responsible party»).
- Your legal name and business mailing address in the US.
- Your business name or DBA, if you use one.
- Your business start date and a short description of what you do.
Hours: the online tool is available Monday to Friday 6:00 a.m. to 1:00 a.m. ET, Saturday 6:00 a.m. to 9:00 p.m. ET, and Sunday 6:00 p.m. to midnight ET.
- Go to IRS.gov and search «Apply for an EIN online». Make sure the address ends in irs.gov.
- Choose your entity type: select «Sole proprietor» (or «Limited liability company» if you formed an LLC).
- Choose your reason: usually «Started a new business».
- Enter the responsible party: your name and SSN or ITIN.
- Add your business details: address, trade name, start date, industry and whether you expect to have employees in the next 12 months.
- Review and submit. Your EIN appears on screen.
- Download your confirmation letter (CP 575) right away and save the PDF. It’s the official proof of your EIN, and banks often ask for it.
Things to know:
- You must finish in one session; it times out after 15 minutes of inactivity.
- You can only get one EIN per responsible party per day.
- If your principal place of business is outside the US, you can’t use the online tool; apply by phone, fax or mail with Form SS-4 instead.
Other ways to apply: you can fax or mail Form SS-4 to the IRS, but these take days (fax) or weeks (mail). Online is almost always the best option.
After you get your EIN
Where to use it:
- Form W-9 for every client: enter the EIN instead of your SSN. See How to Fill Out a W-9 as a Freelancer.
- Your business bank account. Compare options in Best Business Bank Accounts for Freelancers.
- Payment platforms (Stripe, PayPal, marketplaces) that issue you a 1099-K.
- State registrations, such as a sales tax permit or state employer account.
- Retirement plans such as a Solo 401(k).
Where you still use your SSN: your personal tax return (Form 1040, Schedule C and Schedule SE) and your quarterly estimated tax payments.
Lost your EIN?
Look for your CP 575 confirmation letter, old business tax filings, bank account paperwork or a W-9 you’ve sent to a client. If you can’t find it, call the IRS Business & Specialty Tax Line; after verifying your identity they can give you the number over the phone.
Closing your EIN
If you stop your business, the IRS won’t reuse the number, but you can ask them to close the account by sending a letter with your business name, EIN, address and reason for closing (include a copy of your CP 575 if you have it).
Mistakes and scams to avoid
- Paying for an EIN. Many websites look official and charge $50-$300 to «file» your application. The IRS never charges for an EIN; apply only on irs.gov.
- Getting several EINs by mistake. A sole proprietor normally needs only one, even with several side businesses.
- Thinking an EIN creates a company. It doesn’t; you’re still a sole proprietor until you form an LLC or corporation.
- Not saving the confirmation letter. Download CP 575 the moment you get your number.
Frequently asked questions
Is an EIN free?
Yes. The IRS never charges a fee for an EIN. If a website asks you to pay, it’s a third-party service, not the IRS.
How long does it take to get an EIN?
Online, you get it immediately after submitting the application, during the tool’s opening hours. Fax and mail applications take days to weeks.
Can I use my SSN instead of an EIN as a sole proprietor?
Yes, if you have no employees and none of the other IRS requirements apply. Many freelancers switch to an EIN simply to keep their SSN private.
Does getting an EIN change how I pay taxes?
No. As a sole proprietor you still report business income on Schedule C of your personal return and pay self-employment tax. The EIN only identifies your business on forms like the W-9.
Do I need a new EIN if I form an LLC?
Usually yes. An LLC is a new legal entity, so it gets its own EIN rather than using the one from your sole proprietorship.
Can I have more than one business under the same EIN?
As a sole proprietor, generally yes: one EIN covers you, even with several lines of business or DBAs.
Can a non-US citizen get an EIN?
Yes, with an SSN or ITIN, or through Form SS-4 for businesses without one. If your principal place of business is outside the US, apply by phone, fax or mail instead of online.
This article is general information, not tax or legal advice. Consult a CPA or Enrolled Agent for your situation.
Sources
- Get an employer identification number (IRS): online tool hours, requirements, one EIN per day, 15-minute timeout, no fee, immediate issuance.
- Federal Employer ID Number (South Carolina Business One Stop): conditions that require an EIN and the option for sole proprietors to use their SSN.
- Do you need an EIN? (IRS): the IRS’s full checklist, including the Keogh plan requirement. We couldn’t open this page while drafting; check it before publishing and link it in the «When a sole proprietor must have an EIN» section.