Key Takeaways

  • A single-member LLC can use the owner’s Social Security Number (SSN) if it is taxed as a disregarded entity with no employees or excise tax obligations.
  • An EIN becomes necessary for a single-member LLC if it hires employees, elects corporate tax treatment, or meets other IRS or business banking requirements.
  • Using an EIN, even when not legally required, can help preserve liability protection and enhance business credibility with banks and vendors.
  • Certain types of income, including 1099-MISC payments, may necessitate use of an EIN even for disregarded entities.
  • Some states and financial institutions may require an EIN regardless of IRS rules.
  • You can apply for an EIN online, by fax, or mail through the IRS.

There are requirements regarding EIN for Single Member LLCs. Single Member LLCs usually can file under the owner's SSN but there are some circumstances in which requires the business to have its own identification.

What Is a Limited-Liability Company (LLC)?

An LLC is a business structure that offers business owners limited protection by separating the owner from the business. Setting up a limited liability company allows an owner to avoid double taxation since they're only taxed at the owner level. An LLC offers some liability protection that a conventional partnership does not offer. If you have an LLC partnership but do not want your partner to have a say in the day-to-day business affairs, then you must:

  • Set your LLC as a manager-managed entity. This means only the designated manager has the authority to dictate how this business is run.
  • List yourself as the member (or agent) designated to manage the company.

What Is a Single-Member LLC?

If you are the only member of an LLC, the IRS will treat you as a sole proprietor. Single-member LLCs are taxed as a sole-proprietorship because the IRS recognizes this structure as a "disregarded entity." LLCs were created to offer owner-protection in a partnership. Given this entity type was created for partnerships, you must have a partner in order to form an LLC. Business owners under LLCs are known as Members.  While single-member LLCs are "disregarded entities," there are circumstances when the owner needs an EIN.

If you do not want to risk the IRS characterizing your business as a single entity LLC, then get a partner. Consider giving a small percentage of your business to a family member or close friend. The IRS, and in the majority of the circumstances, the courts consider a business a single-member entity if your only partner is your spouse.

You are not required to have an EIN if you are the owner-operator of a home-based business. This means you manage the business and you also provide the services (a solopreneur). Just designate your business as a sole proprietorship and the IRS will allow you to use your social security number instead of applying for an EIN.

When Can a Single-Member LLC Use a Social Security Number?

A common question is whether a single-member LLC can use a Social Security Number instead of obtaining an Employer Identification Number (EIN). The answer depends on how the LLC is taxed and its business activities.

You may use your SSN for your LLC if:

  • You are the sole owner (single-member LLC).
  • Your LLC is not treated as a corporation for tax purposes.
  • Your LLC does not have employees.
  • Your LLC does not file excise taxes.
  • You are not establishing a retirement plan such as a Keogh.
  • You are not required to open a business bank account or apply for credit in the LLC’s name.

In these cases, your single-member LLC is treated as a "disregarded entity," and the IRS allows you to file taxes using your SSN. However, this doesn’t apply if you plan to hire employees or engage in certain types of business operations, as discussed below.

Things to Do for a Single-Member LLC Owner

If you want the IRS to recognize your LLC as a corporate entity for tax purposes:

  • Download the IRS Form 8832 (Entity Classification Election).
  • When filling out the form, be sure to opt for corporate tax treatment.

If you are considered a "disregarded entity" then add your LLCs EIN number to your Schedule C on your tax return. As a single-member LLC, remember you are a business and should keep accurate and detailed records just like a corporation would have to. 

Document:

  • meeting notes.
  • action items and their resolution dates.
  • critical decisions.
  • updated member roster with votes and roles.

It is critical to separate your business transactions from your personal transactions. Mixing your business funds with your personal funds can have some serious implications. Your business is a separate entity from you, the member.

Taxation Election

LLCs have flexibility in how they are taxed because they are not officially recognized by the IRS. For tax purposes, single-member LLCs can choose to be recognized as corporations, partnerships, or sole proprietorships. All LLCs, including single-member ones, need an EIN if they are listed as a corporation or if they have employees. If you sell your LLC, the new owners cannot use your EIN, they must request their own EIN from the IRS.

What Is an EIN?

The IRS assigns a nine-digit unique identifier called an employer identification number (EIN) to your business. An Employer Identification Number is to a business what a social security number is to a person. If your business is required to file tax returns, you must use its EIN. Your EIN is the manner in which the IRS tracks your business' tax records.

Other Reasons for Obtaining EIN

For tax purposes, the IRS treats a corporation and its owner as two different entities. The IRS keeps track of a corporations activities and its tax returns by its EIN. It does not matter whether you use your SSN or EIN you receive 1099-Misc income.

When Is an EIN Required for a Single-Member LLC?

A single-member LLC must obtain an EIN in the following situations:

  • The LLC hires employees (or plans to within the next 12 months).
  • The LLC elects to be taxed as a corporation (C-corp or S-corp).
  • The LLC is subject to excise taxes, such as those for certain transportation or manufacturing activities.
  • The LLC maintains a Keogh retirement plan.
  • The LLC converts from a sole proprietorship that already had an EIN (in many cases, a new EIN is required).
  • You are required by a financial institution or state law to use an EIN, even if the IRS would otherwise allow SSN use.
  • You want to build business credit, separate from your personal credit history.

Even when not required, having an EIN may be beneficial for administrative purposes and privacy protection. Using an SSN in business transactions can expose you to identity theft.

Benefits of Using an EIN Instead of a Social Security Number

Using an EIN—even when not strictly required—offers several advantages to single-member LLCs:

  • Enhanced privacy: Avoids using your SSN on business forms or with contractors.
  • Improved liability protection: Helps demonstrate separation between you and the business, supporting the LLC's limited liability shield.
  • Simplified banking: Most banks require an EIN to open a business account, even if the IRS doesn’t.
  • Credit building: Helps establish business credit history.
  • Professional image: Signals legitimacy to partners, vendors, and clients.

These benefits are why many single-member LLC owners voluntarily apply for an EIN as a best practice.

Can a Single-Member LLC Use a Social Security Number on a 1099?

If your LLC is considered a disregarded entity, you can report income on your personal tax return using your SSN. However, if your LLC receives payments that require a Form 1099-MISC or 1099-NEC, many payers will ask for an EIN rather than an SSN to avoid sharing personal data. You can still report the income under your SSN, but some companies prefer or require an EIN for vendor compliance.

If you use your SSN and report as a sole proprietorship, make sure that the name and tax ID number on your W-9 match IRS records to avoid backup withholding.

How to Apply for an EIN

There are multiple ways to apply for an EIN with the IRS:

  1. Online: The fastest method. You’ll receive your EIN immediately. This is available to applicants whose business is located in the U.S. or its territories.
  2. By fax: Complete IRS Form SS-4 and fax it to the appropriate IRS number. You’ll receive your EIN in about four business days.
  3. By mail: Mailing Form SS-4 can take up to four weeks.
  4. By phone (for international applicants): U.S.-based applicants are not eligible for this method.

You cannot apply for more than one EIN per responsible party per day. Before applying, confirm whether your LLC already has or needs a new EIN (especially if converting from another entity type).

Frequently Asked Questions

  1. Can an LLC use a Social Security Number instead of an EIN?
    Yes, a single-member LLC that is treated as a disregarded entity, has no employees, and is not subject to specific taxes may use the owner's SSN for tax purposes.
  2. When is an EIN mandatory for a single-member LLC?
    An EIN is required if the LLC has employees, files excise taxes, establishes certain retirement plans, or elects corporate tax treatment.
  3. Can I switch from using my SSN to an EIN later?
    Yes, you can apply for an EIN at any time, even if you originally filed using your SSN. This is common when expanding or formalizing business operations.
  4. Can I use my SSN for business bank accounts?
    Most banks will require an EIN, even if the IRS allows use of an SSN. It’s best to apply for an EIN before setting up a business account.
  5. What happens if I use my SSN but later hire employees?
    You’ll need to apply for an EIN as soon as you anticipate hiring employees, since payroll taxes must be reported under an EIN.

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