How to Get an EIN for an LLC: Everything You Need to Know
You can obtain an EIN on the IRS website, by calling the IRS directly, or by mailing in the required forms.4 min read
Want to know how to get an EIN for an LLC? An employer identification number (EIN) is similar to a Social Security number, but it's used to identify businesses. You can obtain an EIN on the IRS website, by calling the IRS directly, or by mailing in the required forms.
Do I Need an EIN for My LLC?
A limited liability company (LLC) is a type of business which enjoys pass-through taxation and limited liability, making it a great choice for new entrepreneurs. Not only does an LLC's structure protect your personal assets and allows you to claim business profits on your personal tax returns, but it also allows you to choose from multiple taxation options. For example, you can opt to be taxed like a sole proprietorship or an S-corporation depending on your preferences.
If you are a sole proprietor without any employees, you may use your Social Security number in place of an EIN. If you plan to hire employees, however, you must obtain a federal EIN for that specific purpose.
The Internal Revenue Service uses your EIN in all agency dealings and tax filings, so it's a smart option to have even if you don't plan to hire any employees. One of the biggest advantages to having an EIN for your LLC is that it can help you avoid identity theft issues you may encounter when using your personal Social Security number on client and vendor forms.
There are a few ways in which the IRS classifies LLCs either as partnerships, corporations, or other taxable entities separate from their owner:
- When one person owns the entity, the business is a sole proprietorship
- Single-member LLCs can choose to be either a corporation or taxable disregarded entity
- Multi-member LLCs may select corporation or partnership status
- When a corporation owns an entity, it is considered a division or branch of the corporation
LLC owners are referred to as “members,” and there can be one or multiple members. As a single-member LLC, you may not need an EIN, especially if you have a home-based business and act as the owner, director, and manager. When you hire that first employee, however, you will need to apply for an EIN for payroll tax purposes.
Choosing a Responsible Party
Your LLC's responsible party is the person who maintains control over the business assets, allowing them to control, direct, or manage the LLC and how its funds are distributed.
When an LLC has multiple members, a single individual must be named as the responsible party. This person should then obtain an EIN for the company.
You may need to apply for a new EIN if your LLC changes ownership structure. In other words, if you have a single-member LLC and have opted for a sole proprietorship tax structure, but you now want to select a corporation tax structure, you will need to apply for a new EIN.
If you sell your business, the new owners must obtain their own EIN from the IRS instead of using yours.
Obtaining Your EIN
There are a few ways of getting your EIN from the IRS. The easiest method is to apply online. Your information is validated right away, issuing your EIN immediately.
Some business owners choose to apply for an EIN over the phone or via mail or fax. If you call the IRS for your EIN, you will receive the number by the end of the call. The fax or mail methods will take longer and require you to complete Form SS-4, which you will need to print from the IRS website.
When faxing the form, include your own fax number. The IRS will issue a return fax with your EIN within four days. Snail mail takes longer, so it's difficult to predict when you will receive your EIN.
In some cases, you may want to consult a lawyer to help you complete the forms required to establish your LLC and get your EIN. Doing so ensures you won't miss any crucial steps along the way.
What if I Misplace My EIN?
Misplacing your EIN is easily rectified by calling the IRS's telephone assistance line Monday through Friday during regular business hours. Once the IRS verifies that you are the LLC's responsible party, it will provide you with the EIN over the phone. Remember, your LLC needs this federal tax ID number for business reasons, such as hiring employees or opening a business bank account, so keep your EIN safe.
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