Getting your Employer Identification Number is the starting line, not the finish. What to do after getting your EIN number falls into a predictable sequence: protect the confirmation notice, open a business bank account, decide how the IRS should tax your entity, register with your state, get the right licenses, and set up payroll correctly before you hire anyone. The first few weeks are where clean launches and expensive stumbles get decided.
Save the CP 575 Confirmation Notice
The IRS sends a CP 575 notice to confirm your EIN assignment. It lists your EIN, your business’s legal name, the filing address, and which federal tax forms you’re required to file.1Internal Revenue Service. Employer Identification Number Banks, state agencies, and licensing boards will all ask for it, so treat it like your Social Security card.
Store the CP 575 somewhere secure and keep a digital backup. If you applied online, you also received an immediate confirmation you can download, but the mailed CP 575 is the version most institutions prefer. If you lose the notice, you can retrieve your EIN by checking previously filed tax returns, contacting a bank where you used the number, or calling the IRS Business and Specialty Tax Line at (800) 829-4933, open weekdays 7:00 a.m. to 7:00 p.m. local time.2Taxpayer Advocate Service. Getting an EIN
Open a Business Bank Account
A dedicated business account is the first practical use of your EIN and one of the most important steps for keeping personal and business finances separate. Mixing the two is how owners accidentally pierce the corporate veil their entity was designed to maintain.
Most banks will ask for your CP 575 (or EIN confirmation letter), a certified copy of your Articles of Incorporation or Organization, government-issued ID for each authorized signer, and the business’s physical address. Under federal anti-money-laundering rules, banks also collect information on beneficial owners. Each person who owns 25% or more of the company, plus one individual with significant management control, must provide their name, address, date of birth, and Social Security number or passport number.3eCFR. 31 CFR 1010.230 – Beneficial Ownership Requirements for Legal Entity Customers Bring that information for every owner or you’ll be sent home to gather it.
Initial deposit requirements and monthly maintenance fees vary widely. Some commercial accounts require a few hundred dollars to open; others charge monthly fees unless you keep higher balances. Fee structures for business accounts are far less standardized than personal banking, so shop around.
Decide How the IRS Should Tax Your Business
This is the step most new owners either don’t know about or put off until it costs real money. By default, the IRS taxes a single-member LLC as a sole proprietorship and a multi-member LLC as a partnership. If that default doesn’t fit, you have to file an election, and the deadlines are tight.
The most common election is Form 2553 to be taxed as an S corporation. For many profitable small businesses, S-corp status reduces self-employment tax by letting the owner split income between a reasonable salary and distributions. The deadline is no later than two months and 15 days after the beginning of the tax year the election is to take effect. For a calendar-year business that formed on January 1, that means March 15. Miss it and you wait until the following tax year unless you can show reasonable cause.
If you want a different classification entirely, Form 8832 lets you elect how the IRS treats your entity. The effective date of an 8832 election must fall within 75 days before filing or within 12 months after filing. Neither election happens automatically. If you’re unsure which classification saves you the most, have that conversation with a tax professional before the deadline passes. Unwinding a bad election is far harder than making the right one upfront.
Register for State and Local Taxes
Your federal EIN anchors your state tax registrations, but each state runs its own accounts through its revenue department. Which ones you need depends on what your business does and whether you’ll have employees.
- A sales tax permit or seller’s license, required before your first taxable sale in most states, authorizes you to collect sales tax and obligates you to file periodic returns.
- State income or franchise tax registration. Most states tax business income; some impose franchise or gross receipts taxes instead of, or on top of, income tax. Registration usually happens on the same portal as your sales tax permit.
- State unemployment insurance, required once you hire employees and reach a state-specific payroll threshold. Your EIN is required on the application, and employers pay into the fund based on payroll and an assigned rate.
Many state portals let you register for multiple tax accounts in one session. Don’t wait until your first sale or first hire. Processing times vary, and operating without the proper registrations can trigger penalties or back-assessed taxes.
Get the Licenses and Permits You Actually Need
Most businesses need at least one operating license or permit from a local or state agency. A general business license from your city or county is the baseline in many jurisdictions, and the application typically asks for your legal name, physical location, activity type, and EIN.
Licensing fees vary. A basic local license might cost under $100, while specialized permits for construction, food service, or professional services run higher. Regulated industries often face additional oversight from state licensing boards, with separate applications, exams, or proof-of-insurance requirements layered on top of the general license.
Operating without a required license can bring fines, cease-and-desist orders, or the loss of your ability to enforce contracts. Check both your city or county clerk and your state’s business licensing portal for every permit your specific business type needs before you open.
Set Up Payroll Before You Hire
Hiring your first employee triggers a cascade of federal and state requirements, and the penalties for getting these wrong are among the steepest a small business can face.
Collect W-4 and I-9 Forms From Every Hire
Every new employee must complete IRS Form W-4 so you can calculate federal income tax withholding.4Internal Revenue Service. About Form W-4, Employee’s Withholding Certificate Every hire must also complete Form I-9 to verify identity and work authorization, including U.S. citizens. Keep completed I-9s on file for three years after the hire date or one year after employment ends, whichever is later, and produce them if the Department of Homeland Security or Department of Labor requests an inspection.5U.S. Citizenship and Immigration Services. I-9, Employment Eligibility Verification
Enroll in EFTPS
The Electronic Federal Tax Payment System is how you deposit payroll taxes with the IRS, including withheld income tax, Social Security, Medicare, and federal unemployment tax. Enrollment is not automatic when you receive your EIN. You enroll separately at EFTPS.gov or by mailing Form 9779, and processing takes about seven business days.6Internal Revenue Service. EFTPS – The Electronic Federal Tax Payment System Don’t wait until your first payroll is due.
Whether you deposit monthly or semi-weekly depends on a lookback period the IRS defines for each form type; most new employers start as monthly depositors.7Internal Revenue Service. Employment Tax Due Dates Late deposit penalties escalate quickly: 2% if you’re one to five days late, 5% at six to fifteen days, 10% beyond fifteen days, and 15% if the taxes remain unpaid after the IRS sends a notice demanding payment.8Internal Revenue Service. Failure to Deposit Penalty
Know the Trust Fund Recovery Penalty
Payroll taxes withheld from wages are trust fund taxes because you’re holding them for the government. If those taxes aren’t deposited, the IRS can assess the trust fund recovery penalty against any person who was responsible for the deposits and willfully failed to make them. The penalty equals 100% of the unpaid trust fund portion and applies to individuals personally, not just the entity.9Internal Revenue Service. Employment Taxes and the Trust Fund Recovery Penalty This is one of the few situations where personal assets are directly at risk regardless of your entity structure.
Report New Hires to Your State
Federal law requires employers to report each new hire to their state’s Directory of New Hires within 20 days of the hire date. States can set shorter deadlines, and employers who transmit reports electronically may instead use two monthly transmissions.10Office of the Law Revision Counsel. 42 USC 653a – State Directory of New Hires The reports feed the National Directory of New Hires and are used primarily to locate parents who owe child support.11Administration for Children and Families. New Hire Reporting for Employers
Post the Required Workplace Notices
Federal law requires certain labor law posters where employees can see them. Which posters apply depends on which statutes cover your business, but common ones include notices for the Fair Labor Standards Act, the Family and Medical Leave Act, the Occupational Safety and Health Act, and the Employee Polygraph Protection Act.12U.S. Department of Labor. Workplace Posters Your state will have its own required postings on top of the federal ones. The Department of Labor’s elaws Poster Advisor can help you identify the specific set your business needs.
Buy Workers’ Compensation Insurance
Nearly every state requires employers to carry workers’ compensation insurance, and most trigger the requirement as soon as you hire your first employee. Rules about when coverage kicks in, what it costs, and which insurers offer it vary by state. In many states, operating without workers’ comp when it’s required is a criminal offense, and you’d be personally liable for any workplace injuries in the meantime.
Keep the IRS Updated as Things Change
Your EIN is permanent, but the information attached to it has to stay current. If your business changes its mailing address, physical location, or responsible party, notify the IRS with Form 8822-B.13Internal Revenue Service. Responsible Parties and Nominees The responsible party is the individual who owns, controls, or directs the business and manages its funds.
A change in responsible party carries a mandatory 60-day filing deadline. Address changes have no formal deadline but affect where the IRS sends notices, so delays mean missed correspondence. Processing takes four to six weeks, and you mail the form to the address listed in the instructions based on your old business location.14Internal Revenue Service. Form 8822-B – Change of Address or Responsible Party – Business Don’t attach Form 8822-B to your tax return; it gets mailed separately.
Start Building Business Credit
Your EIN lets the business build a credit history separate from your personal score. That matters later when you need financing, because lenders who see an established business credit profile are more likely to extend credit on the strength of the business itself rather than requiring a personal guarantee.
Start by registering with the major commercial credit bureaus. Dun and Bradstreet assigns a D-U-N-S Number, a nine-digit identifier that tracks your company’s payment history and creditworthiness. Experian and Equifax also maintain business credit files.
The fastest way to generate history is opening net-30 vendor accounts. These are trade credit arrangements where a supplier lets you buy products and pay within 30 days. Some net-30 vendors report your payment history to commercial credit bureaus, which means every on-time payment builds your profile. Look for vendors that explicitly state they report to D&B, Experian, or Equifax. Your EIN is required on these applications. Start with two or three accounts, pay every invoice early or on time, and within six months you’ll have a foundation that makes the next round of credit applications significantly easier.
Over time, this profile opens the door to business credit cards and commercial loans that don’t lean on your personal credit score. The separation isn’t instant, and many lenders still check personal credit for newer businesses, but a strong business credit file gives you options a sole proprietor operating under a Social Security number simply doesn’t have.