A Federal Tax ID number (sometimes referred to as an EIN or Employer Identification Number) is essential if you want to run your business in America. This nine-digit number is assigned to you by IRS for tax filing and reporting purposes. With it, you can also open a bank account, hire employees, contribute towards employees’ 401(k) plans, and even file for bankruptcy. While most businesses must have an EIN, this is optional for some single-owner companies.