LLC EIN Application: Everything You Need to Know
The LLC EIN application is primarily done online, so businesses no longer need to apply via mail or fax, although you may choose to do so. 3 min read
2. What Is an LLC?
3. What Is a Responsible Party?
4. How to Get an LLC EIN
5. Tips for Applying Online
The LLC EIN application is primarily done online, so businesses no longer need to apply via mail or fax, although you may choose to do so. An Employer Identification Number (EIN) is a unique, nine-digit number the Internal Revenue Service (IRS) issues to identify businesses. Getting an EIN for a limited liability company (LLC) is a straightforward process you can complete online.
Most businesses are required to have an EIN even if they don't have employees. For instance, you probably need an EIN to open a business checking account. You should start your EIN application by familiarizing yourself with common terms in the obtainment process.
Consider your LLC's EIN like a Social Security number for businesses. EINs are used for employment tax identification purposes, banking, and general tax information.
There are several reasons to apply for an EIN:
- Starting a new business
- Hiring employees, including household staff
- Opening a bank account requiring an EIN
- Applying for a business line of credit
- Changing the legal ownership or character of your business
- Forming a pension plan, trust, partnership, LLC, or corporation
- Representing a business-like estate after the owner's death.
What Is an LLC?
A limited liability company is a business combining the taxation benefits of a sole proprietorship or partnership with a corporation's limited liability protections. As such, an LLC protects your personal assets and allows you to claim your LLC's profits on your personal tax returns. You may also opt for different taxation options, such as being taxed similar to an S corporation. Today, LLCs are the most popular business type in America.
What Is a Responsible Party?
The LLC's “responsible party” is someone who has control over the business' assets or funds. Being the responsible party allows an individual to manage, control, or direct the business and how its assets and funds are allocated.
When an LLC has multiple members (LLC owners are called members), the members must name a single representative to act as the responsible party and obtain a Federal Tax ID Number on behalf of the LLC. This includes obtaining an EIN.
How to Get an LLC EIN
While obtaining an EIN for your LLC is easy, there are a few steps to follow:
- Prepare your answers before starting the application process, including each member's Social Security number, projected wages, purpose for filing, and other general information about the LLC.
- Designate the person who will act as the responsible party.
- Apply for the EIN online via the IRS website. The average processing time for EIN approval is about 30 minutes between the hours of 7 a.m. and 10 p.m. PST. Keep in mind that the IRS does not provide phone support for online EIN applications.
- Apply for the EIN by mail. If you prefer to file the traditional way, you can submit your application by mail. Just expect to wait four to five weeks for a response.
- Apply for the EIN by fax. The IRS does accept EIN applications via fax, but the processing time is about four days. There is also no confirmation as to whether the application was successfully delivered.
- Apply by phone. You may apply for an EIN by calling the Business & Specialty Tax line at 800-829-4933 (or 215-516-6999 internationally), Monday through Friday from 7 a.m. to 10 p.m. You will receive an EIN by the end of the phone conversation.
After applying for your LLC EIN, you should receive the EIN documents in the time frame specified by your application method. You should also look for a traditional mail envelope from the IRS, which includes your official Tax ID documents.
Tips for Applying Online
To obtain your EIN online, which is the easiest method, go to the EIN application page on the IRS website. Click “Apply Online Now.”
Once in the application, you must identify your company's legal and tax structure (in this case, an LLC). Simply click on the “Limited Liability Company (LLC)” button. Read over the supplied definitions throughout the application if you feel stuck.
When you select LLC and hit “Continue,” you will need to provide member-related information as well as the business' physical location. Type the number of members in the field and select your LLC's state. You must then explain why you are requesting an EIN, such as you:
- Started a new business
- Hired employees
- Need an EIN for banking
- Changed your type of organization.
Follow each additional prompt until the application is ready for submission.
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