How Do I Get an EIN for My LLC: Everything You Need to Know
The owners (also called members) of an LLC may or may not need an EIN depending on the structure of their company. 3 min read
How do I get an EIN for my LLC? The owners of a Limited Liability Company (LLC) can obtain an EIN (Employer Identification Number) pretty easily through the IRS (Internal Revenue Service) either online, by mail, by phone, or by fax.
Do LLCs Need EINs?
First, you might wonder if you even need an EIN for your business, especially if you don't plan to actually have any employees. The owners (also called members) of an LLC may or may not need an EIN depending on the structure of their company.
Single-member LLCs sometimes are not required to obtain an EIN. Because LLCs are state entities, the state in which the business is formed will determine whether or not an EIN is required in certain circumstances.
Usually, home-based companies, with one person acting in several capacities like manager, director of operations, maintenance, and owner, do not need to get an EIN, because this IRS can view them as a sole proprietorship. The owner's social security number (SSN) is used as the company's EIN if it's acting as a sole proprietorship. Sometimes owners of this type of entity might not want to use their SSN in this capacity, so they can choose to obtain an EIN instead, even though it's not required.
Any time an LLC hires employees, it must have an EIN. Before 2009, single-member LLCs were allowed to just use the SSN of the owner as their EIN when it came to filing taxes, but now they have to use an EIN.
Because the IRS doesn't actually view LLCs as their own business entity type, the owners have to choose a tax designation. They can choose from the following designations:
- Corporation (more than one member)
- Partnership (more than one member)
- Disregarded entity (sole proprietorship, only with one member)
If they choose to be treated as a corporation or a partnership, they will need to obtain an EIN. Disregarded entities usually aren't required to get EINs.
Anytime an LLC changes the structure of their ownership, they might need to file for an EIN. If a single-member LLC adds a second member, they will need to change their tax classification and, therefore, will also need a new EIN. If the owner of an LLC sells their business, the new owner will need to get a new EIN for the company.
What Is an EIN?
An EIN basically acts like a social security number for a company. They are used when the business files taxes or deals with the IRS in any capacity. They are also usually required to open business bank accounts or to get business credit cards.
Using an EIN instead of the owner's social security number is a good way to protect the identity of the business owner. Sometimes, even if an EIN isn't required, it's a good idea to have one to keep a good separation between the business owner and the company itself.
How To Get an EIN
Business owners can obtain an EIN easily by visiting the IRS website, mailing or faxing in a form, or even calling (267) 941-1099 if you're an international applicant.
Before calling the IRS, you'll want to be sure that you have all of your information ready to go. You'll need to know the following information about your business:
- All members' social security numbers.
- Reason for obtaining an EIN.
- Estimated wages.
- Personal information of the designated responsible party.
- State in which the LLC is operating.
- Type of entity.
The simplest way to get an EIN from the IRS is by using their online application. This process will provide you with an EIN immediately once the application process is completed, provided it is done during the specified hours. You'll need to fill out and submit Form SS-4.
If you choose to apply via mail, the process can take up to five weeks. Sometimes it can move more quickly if the IRS is not backed up. If for some reason you are denied an EIN, you won't know that you need to restart the process until after those several weeks that it takes to process. This can lead to a lengthy and frustrating process.
To apply through mail, you'll need to download the SS-4 form from the website. All of the same information is required whether you apply via mail, online, fax, or phone.
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