How to Get a Tax ID Number for an LLC? (In-Depth Guide)
If you intend to hire employees or plan to open a business bank account, obtaining a tax ID number, or EIN, is necessary.
Whatever the reason, you must follow state requirements and submit all pertinent documents.
As an expert in the business field, I gained over a decade of practice helping clients with LLC formation, taxation, and organization.
I’ll provide you with an in-depth guide on obtaining a tax ID number, backed by extensive research and collaboration with our tax experts.
Quick Summary:
- To get a tax ID number for an LLC, complete and submit the IRS Form SS-4 either online, by fax, or by mail.
- The necessity for an EIN varies with the specific activities and structure of the LLC.
- Over 80% of small businesses with employees require an EIN for tax and legal transactions.
- I advise LLCs to obtain an EIN early to facilitate business operations and ensure compliance.
How To Get an LLC Tax ID Number
To get an LLC tax ID number, you must determine your eligibility, fill out the application form, and submit the document online, by mail, or by mail or telephone [1].
You can consult a law firm with any questions about the process.
1. Determine if Your LLC Needs a Tax ID Number
The easiest way to determine if you need a federal tax ID number is by visiting the IRS website.
Alternatively, the Small Business Administration (SBA) offers a great online tool that helps businesses determine if they need an EIN.
Drawing from my experience as a corporate attorney, I have seen that not all LLCs need to obtain a tax ID number.
If you operate as a single-member LLC, it won’t be necessary to apply for an EIN. Instead, you are required to use your Social Security Number for tax purposes.
However, if your LLC has employees, you must apply for an EIN.
If your LLC is taxed as a corporation, it's best to apply for an EIN. This way, you can be sure that you comply with the law and are doing everything possible to protect your business.
2. Fill Out the Federal Tax ID Number Application
Fill out the federal tax ID number application form, which is available on the IRS website.
I advise my clients that it is mandatory to provide all the requested information to speed up the application process.
3. Submit the Document
Once you have filled out the EIN application form, submit the document.
Online submission offers a quicker option but with an associated fee.
Alternatively, applying by mail incurs no charge but extends the processing time to approximately two to five days.
What Is the Purpose of Tax ID Numbers?
The purpose of Tax ID numbers in LLCs is to identify the business for tax and financial obligations.
They are used in tax filings, opening business bank accounts, hiring employees, and handling other financial activities.
Essentially, they serve as the federal identity of the LLC, similar to how a Social Security Number works for individuals.
According to the United States Census Bureau, there were 436,358 businesses who filed last February 2024, which reflected a decrease of 2.7% compared to January 2024.
"Citizens should pay taxes to enable the government to provide adequate services to its constituents."
- Delina Chantel, Mergers & Acquisitions specialist & Writer for Venture Smarter
What Are the Requirements for Getting a Company’s Tax ID Number?
The requirements for getting a company's tax ID number are the following:
- Business legal name and address
- Principal officer's name and Social Security Number
- Business type (e.g., LLC, corporation)
- Reason for EIN application (e.g., new business, hiring employees)
The application can be submitted online, via fax, or by mail, but the online process provides immediate issuance. The applicant must have a valid SSN, EIN, or ITIN.
How to Change or Cancel an EIN?
To change or cancel an EIN, you need to follow the guidelines below:
- For Changes: Write to the IRS detailing the change (e.g., business structure, ownership), including your EIN, business name, and address.
- Cancellation: If closing your business, send a letter stating this intent along with the EIN and business details.
- Submission: Mail this information to the IRS's correct office.
Remember, while EINs cannot be "cancelled" in the traditional sense, they can be closed out if the business is no longer operating.
How Can I Find My Business Tax ID Number?
To find your business tax ID number, you can look through the document sent to you by the IRS upon the registration of your LLC or contact the Business & Specialty Tax Line.
If you have an EIN, it will be located on any paperwork you receive from the Internal Revenue Service (IRS).
Furthermore, you can also find your EIN by mail. To do this, you must complete the Internal Revenue Service Form SS-Fax or SS–479 and Mail it to the IRS for processing.
FAQs
Can You Have an LLC Without an EIN?
You cannot have an LLC without an EIN if your company hires employees. You will need to apply for a tax ID number if you are a business owner.
What Is the Difference Between LLC’s Employer Identification Number vs. Federal Employment Identification Number?
There are no differences between an LLC's employer identification number and federal employer identification numbers. They are interchangeable terms for the same thing: a tax ID number for LLCs.
Do I Need an EIN if I Am Self-Employed?
You do not need an EIN if you are self-employed. However, you will still need a social security number as taxes must be filed with the IRS under your name.
References:
- https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
