LLC Federal Tax ID: Everything You Need to Know
An LLC Federal Tax ID is the federal employer identification number of the business. It's a 9-digit number that identifies the business for tax purposes.3 min read
An LLC Federal Tax ID is the federal employer identification number of the business. This is a 9-digit number that is used to simply identify the business for tax purposes. It is a number used not only for tax purposes, but also for processing payroll and entering into business and banking transactions.
LLC Ownership: An Overview
An LLC, also referred to as a Limited Liability Company, is created under state statute.
The Internal Revenue Service (IRS) classifies an LLC as a corporation, partnership, or a disregarded entity (meaning that it is not considered a separate and distinct legal entity from its owners for income tax purposes). Therefore, if you operate a single-member LLC, then you can elect to be taxed as either a disregarded entity or a corporation.
If only one person owns a disregarded LLC, then it is considered a sole proprietorship. If a corporation itself owns a disregarded LLC, then the LLC is considered a division or subsidiary of the corporation. If you operate a multi-member LLC, then you can choose to be taxed as either a partnership or corporation.
Ways to Obtain a Federal Tax ID
Before you can obtain a Federal Tax ID, also referred to as an Employer Identification Number (EIN), you must first ensure that your business is properly set up and that all required paperwork is completed.
You must also have the name of your LLC, business address, and names of all owners. Generally, a single-member LLC doesn’t have to obtain an EIN unless he or she plans on hiring employees.
Any business in the United States that is required to pay federal taxes must have an EIN assigned by the IRS. For example, all persons have a Social Security Number (SSN) and all businesses that have to pay federal taxes have an EIN.
You can obtain an EIN in a few ways:
- Submit an application online
- Mail in the applicable form to the IRS address
- Call the IRS directly and ask that you obtain an EIN (for international applicants only)
- Fax the request to the IRS
For online submissions, you can apply directly on the IRS website. This is the quickest way to obtain an EIN. You will receive an EIN almost immediately after submitting the form.
This application, also known as Form SS-4, is a simple request that provides your business’s name, address, description of your LLC, the category in which you are planning to operate, and the name and social security number of the person drafting the request on behalf of the LLC. Before submitting your request, make sure that you thoroughly review the instructions before completing your request.
If you choose to mail the form, you can download it from the IRS website and mail it in. Keep in mind that you might not receive an EIN for a period of six to eight weeks. Therefore, if you are hoping to obtain this tax ID number immediately, you should file online.
If you prefer, you can call (for international applicants only). The representative on the phone will ask for the same information that is otherwise in Form SS-4. At the end of your call, you will be assigned an EIN, but will have to wait another two to three weeks to actually receive the physical IRS confirmation letter in the mail. If you want, you can also choose to fax the form to the IRS at 859-669-5760. You can expect to receive a validated application and EIN within 4 business days.
If Your EIN is Misplaced
If you misplaced your EIN, then you will have to call the IRS telephone assistance hotline during business hours to obtain the number. Once the representative on the line verifies that you are the responsible party, then he or she will provide you with the LLC’s EIN. You’ll want to keep your EIN in a safe place, as you might need this number to open a business bank account. Furthermore, some vendors and suppliers only work with businesses that have EINs due to the enhanced credibility that having an EIN provides for companies.
If you need help learning more the LLC Federal Tax ID, or if you need help requesting an EIN for your LLC, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5-percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with, or on behalf of companies like Google, Menlo Ventures, and Airbnb.