All you need to know on LLC EIN (Employer Identification Number)
April 13, 2022
What is LLC EIN? And Benefits of an LLC EIN (Employer Identification Number)
EIN (Employer Identification Number) are required for all LLCs (Limited Liability Corporations) with more than one member. In this article, we will walk you through the benefits of an LLC EIN, How to get an EIN number for my LLC, information on Federal EIN for LLC, and other related information on LLC EIN (Employer Identification Number).
Table of Content
A nine-digit number, similar to a Social Security number, is an Employer Identification Number, or EIN. The IRS (Internal Revenue Service) assigns it to a business organization. The EIN is used by businesses that are obliged to file various tax returns in the same manner that an individual’s Social Security number is used. To maintain track of tax returns, the IRS utilizes the EIN as an account number. You’ll need an EIN if your company is a single-member Limited Liability Corporation (LLC) that needs to submit a separate tax return.
Information on Limited Liability Company (LLC) EIN
Regardless of whether they are taxed as a partnership or have decided to be treated as a corporation, all multi-member LLCs require an EIN.
The position for single-member LLCs, on the other hand, is a little different. The IRS treats a single-member LLC as a disregarded entity unless it has opted to be taxed as a corporation. For federal income tax purposes, the LLC’s income is considered as the owner’s income.
An EIN is not necessary for a single-member LLC that is recognized as a disregarded entity unless it meets the following criteria:
One or more workers.
Liabilities for excise taxes
You’ll also need to apply for an EIN if you make any adjustments that prevent your LLC (Limited Liability Company) from being categorized as a disregarded entity. For example, If you add a member to your LLC so that it is no longer a single-member LLC then you will need to obtain an EIN (Employer Identification Number).
What are the Benefits of an LLC EIN?
If you establish your business without any employees and later decide to hire, you will already have an EIN, and no need to spend separate time for the registration of EIN. Thus, it will save you time.
Your company’s identity can be protected with an EIN.
To open a business banking account, most institutions demand an EIN. To keep your and work finances distinct, you will need a business bank account.
Instead of utilizing your Social Security number (SSN), get an EIN. This keeps your SSN confidential and reduces the danger of identity theft.
Although an EIN is not essential for all business loans, most lenders prefer a company that has established its business credit through a business bank account and lines of credit tied to its Employer Identification Number (EIN).
A Guide on “How to get an EIN Number for my LLC?”
If your primary place of business is in the United States or one of its territories, you can register for an EIN online.
A valid Taxpayer Identification Number is required for online applications (ITIN, EIN, SSN).
The “responsible party” is the individual who owns or controls the entity at the end of the day, or who has ultimate effective control over it. The responsible party must be an individual (i.e., a natural person), not an entity, unless the applicant is a government entity.
The Internal Revenue Service provides a free service for obtaining an Employer Identification Number (EIN). Below are the ways to apply for EIN:
Apply by Mail or FAX
You can also fill out a paper form and return it to the IRS via fax or mail. If you’re faxing the documents, make sure you’re using the correct Fax-TIN number, which can change at any time. The fax service is provided 24 hours a day, seven days a week. Make sure to provide your fax number so that the IRS can return your EIN to you via fax within four business days.
If you choose to mail your completed application to your state’s service center, you should anticipate to get your EIN in four to six weeks.
Customers that want to apply for and receive an EIN should use the Internet EIN application. The information is confirmed during the online session after the application is completed, and an EIN is granted instantly. All entities whose major business, office, agency, or legal residence (in the case of a person), is situated in the United States or U.S. Territories, can apply online.
Apply through Telephone
International applicants can acquire their EIN by calling 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday. The person who answers the phone must be authorized to receive the EIN and to answer inquiries about Form SS-4 PDF, Application for Employer Identification Number. Only fill out the Third Party Designee section if you want to provide the identified individual permission to acquire the entity’s EIN and answer questions about Form SS-4 completion. When the EIN is assigned and released to the designee, the designee’s authority ends. For the authorization to be legitimate, you must fill out the signature section.
Information on Federal EIN for LLC
The IRS’s hours of operation for acquiring an EIN are 6 a.m. to 11 p.m. Monday through Friday.
Only businesses based in the United States and its territories are eligible.
A valid Taxpayer Identification Number is required.
Only one application per day is allowed by the entity owner or responsible party.
Your application cannot be saved and must be completed in one sitting.
If the session is not in use, it will time out after 15 minutes. Once the form is completed, you will receive an EIN right away.
If an EIN was previously obtained online, the application cannot be processed.
FAQs on Limited Liability Company EIN (Employer Identification Number)
1. Is EIN and FEIN are same?
Yes, an EIN and a FEIN are interchangeable. The Federal Employer Identification Number is abbreviated as FEIN. The Federal Tax Identification Number, or EIN, is sometimes known as an FEIN. All of these terms refer to the same nine-digit tax identification number. The most important thing to keep in mind is that an EIN or FEIN is a business owner’s version of a social security number.
2. If I forget or lose my EIN, how can I get it back?
Find a previously filed tax return for your existing entity for which you have your lost or misplaced EIN (if you have filed a return). Your EIN should be noted on any previously filed returns. Still, you cannot find out then call the IRS EIN Department at 1-800-829-4933 to talk with a professional.
3. Why should I get an EIN if I don’t need one?
Even if an EIN is not required for your business, organization, or entity, it is highly advised that you obtain one when beginning or forming your business/organization for a variety of reasons:
To protect your personal information, use your EIN instead of your SSN on business applications and licenses.
An EIN is required for many state and local permissions.
To open a business bank account, you’ll need an EIN (Employer Identification Number).
EINs aid in the establishment of a company’s credit history.
4. What is the purpose of an Employer Identification Number (EIN)?
Employer Identification Numbers (EIN) are issued for tax administration purposes only and are not intended for use in any other activity (Example: lotteries, tax lien auction or sales, etc.).
5. What is the Tax ID Number for my LLC?
An LLC that is treated as a disregarded entity will not use its own EIN for any Income Tax Reporting or Filings. Instead, the LLC must utilize the owner’s Social Security Number (SSN) or the owner’s Employer Identification Number (EIN). Even if you have an EIN for your LLC, this is the situation.
However, the LLC will be compelled to utilize its own EIN for certain excise tax and employment tax forms. For those filings, you’ll need to provide LLC’s EIN rather than the LLC’s owner’s SSN or EIN.
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