After you have registered as a limited liability company (LLC), you’ll want to obtain an employer identification number (EIN) for your business from the IRS. An EIN is another name for the nine-digit federal tax identification number (TIN) for your business. You can think of an EIN as the business version of a Social Security number. If you have one or more employees you’ll want to obtain an EIN. If you are a single-member LLC, you’re not required to get an EIN for your business but it still makes sense to have one.
Learn how to get an EIN for an LLC quickly and easily with our simple guide. Forbes Advisor will walk you through how to get your new EIN in just four easy steps.
Does My LLC Need an EIN?
If you are a single-member LLC with no employees, an EIN may not be necessary. Since single-member LLCs only have one owner, and owners of the LLC are not considered employees, they are not required to obtain an EIN. In that case, it’s likely you can file taxes under your Social Security number since the IRS treats single-member LLCs as sole proprietorships.
Meanwhile, if you plan to open a business checking account, you will be asked for your TIN. If you have an EIN, this process becomes much easier. When you file your personal and business tax returns, you can use your EIN. If you plan to hire employees in the future, it makes sense to plan ahead and obtain an EIN. If you are a multi member LLC―with two or more owners―you will need an EIN from the start.
Regardless of if you operate a single-member LLC or a multi member LLC, the IRS requires you to obtain an EIN if you answer “Yes” to any of the following questions:
- Do you have employees?
- Do you operate your business as a corporation or a partnership?
- Do you file any of these tax returns: Employment, excise or alcohol, tobacco and firearms?
- Do you withhold taxes on income, other than wages, paid to a nonresident alien?
- Do you have a Keogh plan?
- Are you involved with any of the following types of organizations?
- Trusts, except for certain grant-owned revocable trusts, individual retirement accounts (IRAs) or exempt organization business income tax returns
- Estates
- Real estate mortgage investment conduits
- Nonprofit organizations
- Farmers’ cooperatives
- Plan administrators
EIN vs. TIN
A TIN is a taxpayer identification number issued by the federal government. There are several types of TINs, including Social Security numbers for individuals and EINs for businesses.
An EIN is a federal employer identification number for a business. The IRS uses your EIN to track income and payroll tax liabilities and payments. An EIN may also be used to identify your business for state and local tax purposes or for financial transactions–similar to the way a Social Security number functions in your personal life
How To Get an EIN for Single-member or Multimember LLC
If you are a single-member LLC or a multi member LLC, you can obtain an EIN
easily through the IRS. The fastest way to get an EIN is to apply online, but you can also apply by mail or fax using Form SS-4. For applications in the United States, obtaining an EIN is free of charge.
International applicants cannot apply online but can apply by mail or fax, or by calling (267) 941-1099.
To begin, here are some quick tips to help guide you through the process:
- To apply online, use a web browser to access the online EIN application on the official IRS website.
- The fastest way to apply is online, and you will receive your EIN immediately. If you choose to apply by mail, you will need to print the application and mail it, which could take up to four weeks. If you apply by fax, the EIN will usually be issued within four business days.
- If you are applying online, note that you have 15 minutes to finish the application. Otherwise, you will need to start over, so make sure you have all your information readily available.
Four Steps to Fulfilling the Online Application Process as Follows
After you have established your business as an LLC, you’ll be ready to file for an EIN. You may have a lot of questions regarding the application process but it is fairly simple, as it is described in the preceding steps.
Here’s how to get an EIN for an LLC in four steps.
Identify Your Legal Structure
The first step is to identify what type of legal structure is applying for an EIN. In this case, you will choose LLC. It will ask you how many members are in the LLC and the state or territory in which the business is located. Lastly, it will ask you to choose one reason that best describes why you are applying for an EIN.
Authenticate the Responsible Party
Here you will be asked to state the name and social security number or TIN of the responsible party of the LLC. This responsible party will identify as one of the following, owner, member or managing member of the LLC or a third party applying on behalf of the LLC.
Provide Details about the LLC
Next, you will be asked to state where the LLC is physically located, followed by a series of questions.
Complete the following sections on the form:
- The name of your LLC
- County where the LLC is located
- State/territory where the LLC is located
- State/territory where articles of organization will be filed
- LLC start date
- Does your business own a highway motor vehicle with a taxable gross weight of 55,000 pounds or more?
- Does your business involve gambling/wagering?
- Does your business need to file Form 720 (Quarterly Federal Excise Tax Return)?
- Does your business sell or manufacture alcohol, tobacco or firearms?
- Do you have, or do you expect to have, any employees who will receive W-2 Forms in the next 12 months?
- What are the first date wages that were or will be paid?
- Number of employees
- Do you expect your employment tax liability to be $1,000 or less?
- What does your business or organization do? You’ll choose from a list of options.
Receive Your EIN Confirmation Letter
Lastly, indicate how you would like to receive your EIN confirmation letter. You will have the option of receiving your confirmation letter online or by mail. After the application is complete, you will receive your EIN immediately. It is important to download, save or print your EIN confirmation notice as soon as it is received.
In a nutshell, an EIN may not be required for your LLC, but having one can be of great benefit to your business. From protecting against identity theft, adding credibility to your business, opening a business bank account and applying for business loans – just to name a few. The process is fairly simple and free of cost, it’s a win-win.
