Get Federal Tax ID for LLC: Everything You Need to Know
Get a federal tax ID for an LLC by filing an application on the IRS website, calling a specially dedicated phone line, or mailing the form to the IRS office.3 min read
2. Get LLC Tax Identification
3. Considerations and Exceptions
4. Additional EIN Information
Get federal tax ID for LLC information for a business by filing an electronic application on the Internal Revenue Service (IRS) website, calling a specially dedicated phone line, or mailing the form to the IRS office.
Federal Tax Overview
All individuals and business entities in the United States that must pay federal income tax need an identifying taxpayer number assigned by the IRS.
For individuals, the taxpayer ID number is their Social Security number. For a business, it's an Employer Identification Number (EIN). An LLC uses the tax ID for tax purposes in the same way that an individual uses a Social Security number for identification.
Get LLC Tax Identification
Obtaining an EIN is just one of the steps involved when setting up a business. A tax ID offers flexibility in an LLC business structure and protects personal assets. When working on the necessary forms for an EIN, you may consult with an attorney to ensure you're making the right decisions for your business structure. Here are a few tips to help you prepare for the application process:
- The questions on the application are complex concerning information about your LLC. Be prepared with the information necessary to answer the questions on the EIN application.
- You'll be asked to name a responsible party. There's only one designated responsible party for each EIN application regardless of the number of members in the LLC. For example, an LLC with multiple owners, also known as members, must name a single individual who is responsible for applying and attaining the EIN on behalf of the limited liability company.
- You may need to discuss who the responsible party will be if you have multiple partners. The person chosen has some control over the business assets, which allows them to directly or indirectly manage, direct, or control how the funds and/or assets are dispensed.
You can apply online or by mail. The online process takes about 30 minutes and available for access from 7 a.m. to 10 p.m. If applying by mail, depending on the volume of applications to process, it can take several weeks before you receive a tax ID number. You may also apply via fax, but you will receive no confirmation the fax was received.
Considerations and Exceptions
- Any business that converts from its current business structure to a limited liability company must apply for a new EIN.
- A limited liability company that changes its structure from a single-member LLC to a multi-member LLC must apply for a new EIN. An LLC that elects to be taxed as a C corporation must get an EIN.
- A single-member LLC with no employees doesn't need a tax ID number. The owner may use their Social Security number for taxes.
- If there's a name change or a location change for a limited liability company, you don't need to apply for a new tax ID number.
- For partnerships that convert to an LLC business structure, the same EIN may continue to be used as long as the limited liability company's classification is as a partnership for tax purposes.
- If your LLC sells to the public, an EIN is required. There are vendors who may not do business with your LLC if you do not have an EIN.
Additional EIN Information
The EIN is used for payroll processing, excise tax reporting, and state tax registration. It's also used when services have been provided to a person or a business in excess of $600 for the year, so a Form 1099 can be issued for the income.
While there are exceptions, an EIN is necessary if you plan to hire employees in the future. Also, if you open a business bank account, you'll most likely need an EIN.
Consider the number as important as a Social Security number and keep it protected at all times especially from potential identity thieves. If the EIN is misplaced, contact the IRS Monday through Friday via the telephone assistance for businesses phone number. Once the IRS representative verifies that the person making the call is the designated responsible party, the IRS will provide the EIN to the caller.
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