What Is an EIN and Why Does It Matter?

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An EIN (Employer Identification Number) is like a Social Security number for your business. It’s issued by the IRS and used to identify your business for tax purposes.

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Even if you don’t have employees, having an EIN:

• Helps you open a business bank account
• Adds legitimacy to your business
• Keeps your personal Social Security number private
• May be required to apply for certain licenses or credit

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How to get it:

You can apply for an EIN directly through the IRS website in about 10 minutes for FREE.

Go to irs.gov and click the link "Apply for an EIN"

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Why a Business Bank Account Is Essential

Once you have an EIN, your next step should be to open a business bank account—even if you’re a sole proprietor. Many banks offer free or discounted checking and savings accounts depending on the specific services you require.

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A separate business account helps:

• Keep personal and business finances clearly divided
• Simplify bookkeeping and tax filing
• Build business credit
• Look more professional to clients and partners
• Protect your personal assets

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What you’ll typically need to open one:

• Your EIN
• Articles of organization or incorporation: You can learn how to create these in our other post: How to Start a Business in Wisconsin
• Your business license (if required):
• A copy of your operating agreement (for LLCs)

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Most banks offer business checking accounts with low or no monthly fees, especially online or local options.

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Don’t Mix Business with Personal

Mixing funds is one of the most common mistakes small business owners make early on. It can create a mess at tax time—and even compromise your liability protection.

Set the foundation right by keeping your business and personal finances separate from the start.

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