Do I need an EIN for my LLC?

do I need an ein for my llc

Business owners need an EIN after forming an LLC to open business accounts, hire employees, and file business taxes.

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Does an LLC need an EIN? Even in the rare instance when the answer is no, it’s still a good idea.

An EIN (employer identification number) is a nine-digit number assigned by the IRS (Internal Revenue Service) to track business activities for federal government tax purposes. EINs are also used by the Social Security Administration, creditors, banks, financial institutions, government agencies, and state administrators for business identification purposes. EINs can be used to open business bank accounts, credit cards, apply for a business license, or for filing tax returns by mail.

If your LLC has more than one owner (called a “member” in an LLC) or has employees, you’re required to get an EIN. An EIN is also required for LLCs that:

  • File excise tax forms.
  • Pay employment taxes.
  • Withhold taxes on income (other than wages) paid to a non-resident alien.
  • Have a Keogh plan.
  • Are involved in trusts, estates, real estate investments, non-profits, farmer co-ops, or plan administrators.

Can an LLC operate without an EIN?

Multi-member LLCs are required to have an EIN for federal income tax purposes. If you’re a single-member LLC with no employees and you don’t have any of the conditions listed above, you can use your personal Social Security number for your LLC. However, there are some very good reasons for even a single-member LLC to have an EIN, which we’ll cover next.

LLC Tax ID Numbers

EIN vs SSN for LLC

Even if you’re in the category of LLCs the IRS doesn’t require to have an EIN, you still have some reasons for getting one:

  • An EIN is required by most banks to open a business bank account. Using your personal bank account for business could endanger your liability protection. If someone takes you to court to try to prove that you and your LLC are the same entity (and thus go after your personal assets), commingling personal and business money could make you look less like an LLC and more like a sole proprietor to the courts.
  • An EIN is required for businesses that file payroll taxes or excise tax returns.
  • Using your Social Security number on your business documents can expose you to identity theft. Having an EIN helps keep your Social Security number private.
  • Some states require an EIN when filing state tax forms.
  • To process payments, some companies require you to have an EIN.
  • An EIN may be required for certain business licenses and permits.
  • Having an EIN gives your business a chance to build its own credit report history apart from your own. A good established business credit history comes in handy when applying for business loans.

How to Get an LLC EIN

The steps to get an EIN include filing an EIN application with the IRS to register your business. The application consists of basic questions to identify your business structure, company information, and reason for applying for an EIN. To file for an EIN, you will need to identify the business type, business address, and summarize your business operations for your company.

You can apply for your EIN and choose to receive your confirmation notice either online immediately, by mail in 4 to 6 weeks, or by fax in 4 business days.

After You Get an EIN for Your LLC

After getting an EIN for your LLC, you can separate your business accounts from your personal information. You can use your EIN to open up company bank accounts, secure loans for your business, obtain business licenses, and keep your business finances separate for federal tax purposes.

We can help!

If you’d prefer to deal with the IRS as little as possible, we can handle the EIN application process for you. We’ll help start your LLC and get an EIN, ensuring that no detail goes missed so your business is fully compliant. We can help you start your company today for $0 with all the support you need to hit the ground running.

Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

EIN for LLC – FAQs

  • Business owners should file for an LLC before an EIN in order to legally verify the name of their business, which is required in order to file for EIN. Filing for an EIN before an LLC may result in your application getting rejected because the IRS will not be able to validate your business type in any state databases.

  • No, an EIN is a federal tax identification number that can be applied to an LLC or other type of business model, whereas an LLC refers to a type of business entity.

  • LLCs benefit from pass-through taxation, meaning LLC earnings go directly to the owners without first paying federal income taxes at the business level. Instead, business owner earnings are taxed only on their personal tax returns.