DUNS Number vs EIN – What’s the difference between the two? EINs and DUNS numbers are identification numbers that businesses use for various purposes. Whether you are a solopreneur, digital nomad, owning an online store or running an enterprise, you can apply for both EINs and DUNS irrespective of your business structure.
EIN and DUNS are similar in some ways, but there are also important differences. This article will explain in detail the concept of DUNS Number vs EIN – What are they, how they’re used, and their key differences.
The Internal Revenue Service (IRS) issues employer identification numbers (EINs), a nine-digit number that serves as a unique identifier for their company. The legal equivalent of a Social Security number for businesses is this. To file tax returns and monitor firms for tax purposes, the IRS uses the EIN.
Most businesses need an EIN. An EIN is not necessary for a sole proprietor who has no employees and does not file any excise tax returns or pension plan tax returns(but can get one). In this case, the sole proprietor uses his social security number as the taxpayer identification number in place of an EIN.
However, if you are sole proprietor, you will need an EIN for the business and cannot use your social security number if you hire an employee or need to file an excise or pension plan tax return. You can get EIN for free from the IRS website or by mailing or faxing Form SS-4 to the IRS.
The process of applying for an EIN has changed over the years. It used to be that businesses had to apply for an EIN through the mail or fax. Now, the IRS allows businesses to apply for an EIN online.
You don’t have to have a business entity established to apply with the IRS online. Meaning, you can apply for an EIN online with any type of business structure. Once you’re ready, you can go to the IRS website and fill out Form SS-4.
You will have to submit certain important details about your business, like the business’s legal name, type of business structure, address, and contact information. You will also need to provide the owner or responsible party’s name and Social Security number or Individual Taxpayer Identification Number.
If you complete the online application, you’ll receive your EIN Number at the end of the online process. Then you can print it out and save your EIN Confirmation Letter in PDF format. The IRS will also mail you a copy of your EIN Confirmation Letter in about 4 to 8 weeks.
Your EIN is used to identify your business for tax purposes. You will use it when filing your taxes, opening a business bank account, and applying for business licenses and permits.
You will also use your EIN when hiring employees. When you hire someone, you must obtain a W-4 form from them. This form asks for their Social Security number.
An EIN works by identifying a business entity for tax purposes. The IRS uses the EIN to process tax returns and track businesses for tax purposes. When requesting an EIN, you must submit certain fundamental details about your company, such as the business’s legal name, entity type, and address.
There are several benefits of applying for an EIN, even if you don’t think you need one. First, it’s free to apply for an EIN. Second, it can help you avoid identity theft. When you use your Social Security number to identify your business, you’re at a higher risk of identity theft.
An EIN is needed if you plan on hiring employees.
Another benefit of having an EIN is that it can help you build business credit. When you use your EIN to apply for business credit cards and loans, you can separate your personal and business finances.
You can apply for an EIN online, by fax, or by mail. The easiest way to apply is online, and you can complete the application in minutes and receive your EIN immediately. Alternatively, if you hire a registered agent in texas (who also offers LLC and EIN services), they can get your EIN for you.
Image source: irs.gov
If you prefer to apply by fax or mail, you must download Form SS-4 from the IRS website. Once you have completed the form, you will fax it to the IRS or mail it to the address listed on the form.
You should receive your EIN within four weeks if you apply by fax or mail, depending on the method you submitted it.
Note: The option of applying for an EIN online is possible only if your business or legal residence (incase of an individual) is located in the US. Businesses outside US territory can apply for an EIN number by following a different process mentioned on the IRS website.
A DUNS number is a unique nine-digit code that identifies business entities. The number is used to track and manage business credit information.
DUNS numbers are issued by Dun & Bradstreet (D&B), a credit reporting agency that provides business credit information. D&B uses the number to create a business profile, which lenders then use to make credit decisions.
Businesses can use their DUNS number to access their D&B report and track their business credit history. This can help improve your business credit score and secure financing. Currently 88% of businesses rely on owners’ personal credit scores to secure financing.
There are a few steps to follow when you apply for your DUNS number.
Image source: dnb.com
First, you will need to gather the required information. To request a D-U-N-S number, you will need to provide the following information:
- The legal name of your business
- The physical address of your business
- The telephone number of your business
- The type of business entity (e.g., sole proprietorship, corporation, LLC, etc.)
- The names of the owners, partners, or principal officers of the business
- The date the business started operating
You can request a D-U-N-S number online, by phone, or by mail.
Next, you must complete an online application form on the Dun & Bradstreet website.
Once you have submitted your application, you’ll need to wait for your new DUNS number. There is no fee to apply for a DUNS number.
Note: You can apply for your DUNS number irrespective of your business’s location or your legal residence.
D&B assigns a unique nine-digit number to business entities, and this number can identify a company or individual in various databases.
When a business applies for credit, the lender will often check the business’s D-U-N-S number to get an idea of the business’s creditworthiness. Lenders may also use D-U-N-S numbers to verify a business’s identity and their address.
The U.S. government uses D-U-N-S numbers to track businesses eligible for government contracts. Contracting officers often check a business’s D-U-N-S number to verify its identity and business information.
The D-U-N-S number can access a business’s credit report from D&B. This report can provide information on the business’s payment history, credit utilization, and more.
D&B also offers marketing services that use D-U-N-S numbers to target businesses with specific marketing messages. For example, a company that sells office supplies may use D-U-N-S numbers to identify businesses that are likely to need office supplies.
DUNS numbers can be useful for businesses of all sizes. They can help businesses build their credit histories and access government contracts, and they can also be used to target marketing messages to specific businesses.
Once you have your DUNS number, you can use it to access your D&B report and track your business credit history. This information can help improve your creditworthiness and secure financing.
You can also use your DUNS number to monitor your business credit score. This score is based on factors such as payment history and outstanding debt. Monitoring your score can help you identify areas where you need to improve your creditworthiness.
The IRS assigns EINs after a business applies for one. The process is relatively simple and can be done online, by mail, or over the phone.
DUNS numbers are assigned by Dun & Bradstreet (D&B). Businesses can apply for a DUNS number online or by calling customer service.
Once a business has an EIN Number, it can be used to open a bank account. Once a business has a DUNS number, it can be used to build business credit.
EINs and DUNS numbers are used for different purposes. EINs are used for tax purposes, while DUNS numbers are used for credit reporting. If you’re unsure between DUNS Number vs EIN, you probably just need an EIN from the IRS. That is required for many things. However, a DUNS Number is optional and is not required.
If you need an identification number for tax purposes, you will need an EIN. This number is assigned by the Internal Revenue Service (IRS) and is used to identify businesses for tax purposes.
If you need an identification number for credit reporting, you will need a DUNS number. This number is assigned by Dun & Bradstreet (D&B) and is used to track business credit information.
If you are confused between an DUNS Number vs EIN, we recommend starting with an EIN Number. A DUNS Number isn’t required, and you can always get one later if you need it for your industry.
DUNS Number vs EIN – Which number do you need? It depends on what you want to use it for. For nearly all businesses, they should first get an EIN from the IRS after the business is formed. A DUNS Number is optional and doesn’t need to be obtained right away. If you find out it’s needed in your industry, you can always apply for one later. And you can still obtain business loans and financing without a DUNS Number.
Matt Horwitz is the founder of LLC University, a website that teaches people how to form LLCs. Matt is the leading authority in LLC education and is featured in CNBC, Yahoo Finance, Entrepreneur Magazine, and the US Chamber of Commerce. Matt holds a Bachelor’s Degree in business from Drexel University with a concentration in business law. LLC University®, established in 2010, was the first company to create free LLC courses in all 50 states.