Getting an EIN and Opening a Business Bank Account for Your Garage Business
Two small chores make a garage business feel real: getting an Employer Identification Number (EIN) and opening a bank account just for the business. Neither takes long, and both make taxes and bookkeeping far simpler later.
Do you need an EIN?
An EIN is a federal tax ID number for a business. The IRS says you need one if, for example, you have employees, operate as a corporation or partnership, or file employment or excise tax returns. A sole proprietor with no employees often can use a Social Security number instead.
Many solo owners get an EIN anyway. It lets you give customers, suppliers and wholesale accounts a business number rather than your Social Security number, and some banks ask for one. If you formed an LLC or corporation, the IRS says to register with your state first and then apply.
How to apply
As of October 2026, the IRS lists these key points for its online application:
- It’s free. The IRS states you never have to pay a fee for an EIN, and it warns that some websites charge for one. Apply directly at IRS.gov.
- You need the responsible party’s SSN or ITIN, and the business must be based in the U.S. or its territories.
- Finish in one session. The form can’t be saved and times out after 15 minutes of inactivity.
- If approved, the number is issued right away. Print or save the confirmation letter.
- The online tool has set hours (Eastern time), roughly early morning to late night on weekdays, with shorter weekend hours. Check the IRS page for the current schedule.
Open a separate business bank account
The SBA recommends opening a business account once you start taking in or spending money for the business, and after you have an EIN. Keeping business money apart from personal money makes bookkeeping cleaner, and the SBA notes that separate business banking can offer some limited personal liability protection.
Banks commonly ask for:
- Your EIN, or your SSN if you’re a sole proprietor
- Business formation documents (for an LLC or corporation)
- Ownership agreements, if there’s more than one owner
- A business license, where your city or county requires one
Requirements differ from bank to bank, so call ahead.
Compare before you sign
Look at monthly maintenance fees, minimum balance rules, transaction limits and any card-processing fees. If you plan to take cards at craft fairs, the SBA suggests comparing per-transaction and monthly fees for merchant services or payment apps, which still need to link to a business checking account.
This is general information, not legal or tax advice. Rules vary by state and by business structure, so check with your state, your bank or a professional if you’re unsure.
More on Garage Business Blueprint
- Sole Proprietor or LLC? Choosing a Structure for Your Garage Business
- Bookkeeping Basics for a Garage Business: A Simple System That Works
- Taxes for a Garage Business: Self-Employment Tax, Quarterly Payments and the Home Office Deduction
