The EIN serves more than just business taxes. As experienced legal advisors, we strongly stress the significance of obtaining an EIN for American businesses.
This is something that we first learned when we started our journey of business formation.
After years of opening different LLCs, together with my team of legal experts, I have decided to create this guide and provide a one-stop for all-EIN-related.
We've thoroughly researched and drawn from our personal experiences to help you understand its significance.
Quick Summary
- An Employer Identification Number (EIN) is a unique nine-digit taxpayer identification number assigned by the IRS to identify entities operating in the United States
- Just like a social security number is for residents, an EIN is for businesses. It is mandatory for various actions, such as filing taxes, opening bank accounts, and hiring employees
- For those running businesses in both the United States and the UK, note that an EIN is equivalent to the VAT.
What Is an LLC EIN Number?
An LLC EIN is an Employer Identification Number assigned by the IRS to identify limited liability companies for tax and financial purposes.
The main EIN purpose is best seen when you may need to provide your EIN to banks when applying for a business loan for your LLC, vendors, and other businesses when opening a business account or transacting business.
If you are not sure whether you should apply for the EIN, check with the IRS.
Applying for a business license is also one of the reasons why you might need to get an EIN.
You can find out more about business licenses in your area by contacting your local chamber of commerce or visiting their website.
A limited liability company is under the obligation to file tax returns, no matter if it chooses to be taxed as a sole proprietorship, partnership, or corporation.
You will need to provide your business taxpayer identification number on the tax return, whether filing it yourself or hiring a tax preparer.
Even if you own a single-member LLC or a multi-member LLC with employees, you will need a federal tax ID.
The Internal Revenu Service website has an extensive list of categories requiring an EIN application.
Some of them include business entities that pay excise taxes, withhold taxes on income, or do business in real estate.
Visit the IRS website for a detailed list of business entities that need an EIN.
How to Get an Ein for LLC?
To get an EIN for an LLC you must fill in an Internet EIN application through the IRS website [1].
This option grants instant access to your EIN and only U.S. entities.
Applying by fax or by mail are two additional options. To apply by fax service, you will need to fill in Form SS-4, available on the IRS website.
The completed form and all required documents should be sent to a fax number (855) 641-6935.
Depending on your location, you can receive the company's EIN within four business days or longer.
Applying by mail is the third option to consider when applying for a company's EIN. In this case, you will need to fill in Form SS-4 and send it via postal service along with all required documents.
The IRS recommends that you use certified mail so that they receive your application within 15 days of being mailed.
Send your mail to Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999. The processing time frame for e-mail applicants is around one month.
International applicants can apply by phone. This option is available only to non-U.S. entities.
Please note that you can call the IRS at 267-941-1099, Monday through Friday from 0800 AM until 1800 PM local time or Saturdays from 12.00 am until 5.00 pm local time (except national holidays).
If you have any doubts about the EIN application process, please consult with an accountant, or tax specialist or contact the Business & Specialty Tax Line.
They will help you through the process and make sure that everything is filed correctly.
Who Can Apply for an EIN?
Entities or individuals can apply for an EIN as long as the IRS identifies them as eligible for this number.
A responsible party of the single-member or multi-member LLC must apply for the EIN.
The responsible party is usually a manager or member of the company or a corporate officer if you own a corporation (C or S corporation).
The following individuals can also apply for a business's EIN:
- A sole proprietor
- Partners in a partnership
- Shareholders in a corporation
- An authorized individual on behalf of a nonprofit organization or estate
- A trustee on behalf of a trust
- An executor on behalf of a decedent's estate
The EIN is free to apply for and can be applied online, by mail, or by fax.
You will need some general information about your company, such as the business name, address, and contact information.
What Can’t You Do Without an EIN?
Without an EIN, you can't file taxes for your LLC. Missing out on your tax obligations is a serious issue and can lead to big fines down the road.
All in all, without an EIN, you cannot open a business bank account, risking your personal liability protection.
Hiring employees becomes limited to independent contractors only. Moreover, the IRS may impose fines and penalties for noncompliance with their reporting requirements.
The IRS uncovers any discrepancies between what they think should be filed and what has been reported; they will contact you for more information and possibly impose fines and penalties for noncompliance.
How to Perform an EIN Number Lookup?
To perform an EIN lookup you can search for it by name, city, or state.
Your previously filed tax return, business credit report, checks for business loans, or bank statements are good places to start.
Contacting the IRS directly can also help you confirm an EIN. You can call the Business & Specialty Tax line Monday through Friday, from 07:00 a.m. to 11:00 p.m. EST.
The quickest way to get confirmation of an EIN is to use the "EIN Verification Service" on the IRS website [2].
This process requires an authorized representative's identification procedure. Call the IRS at (800) 829-4933, and the IRS representative will ask you for personal information over the phone.
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FAQs
How Can I Get a Copy of My EIN Confirmation Letter?
To get a copy of your EIN confirmation letter you will need to apply for it by mail. Once you do that the IRS will mail you a copy within four weeks of receiving your application.
Is an EIN Public Record?
Yes, EIN is a public record because it is associated with the company name.
The IRS makes EIN information available to the public to promote transparency within businesses and help prevent identity theft.
Should I Get My EIN or LLC First?
Prioritize setting up your LLC first. The IRS issues an EIN once your single-member or multi-member LLC is formed.
Applying for an EIN requires a legally established business with articles of organization and an operating agreement in your state of registration.
Is EIN Free for LLC?
Yes, the EIN number is free for LLCs. The IRS issues the EIN, so there is no cost associated with obtaining one.
Simply visit the IRS website and get an EIN online.
It typically takes a few business days to receive the EIN once you have applied.
Is an EIN the Same as a Tax ID?
Yes, an EIN is the same as a tax ID. An EIN is also known as a federal tax identification number.
This number is used by businesses to identify themselves for federal tax purposes, hire employees, or apply for small business loans.
How Many EINs Can You Have?
You can have one EIN per business entity, including corporations, LLCs, and partnerships. Each business must obtain its own EIN.
Sole proprietors without employees can use their social security number for business, but others must have a separate EIN for tax filing and employment tax purposes.
Can I Open a Business Bank Account With Just an EIN?
You cannot open a business bank account with just an EIN. In fact, you will need to provide your LLC's full legal name and address to open a business bank account.
After establishing your LLC, utilize your EIN, not SSN, for official business documents, taxes, and account openings.
Is My EIN Linked to My SSN?
Your EIN is linked to your SSN in most cases. It is common for SSNs to be used with the IRS if you run a sole proprietorship.
Can I Get a Business Loan With Just an EIN?
You can get a business loan with just an EIN, but the lender might consider your personal credit score and require a personal guarantee for approval.
Other criteria will also be assessed for loan approval. If you have any questions about which number you should use, contact an accountant or lawyer.
Is Your EIN the Same as Your Tax-Exempt Number?
No, your EIN is not the same as your tax-exempt number. Your EIN is used to identify your business, while your tax-exempt number is used to exempt your business from paying taxes.
Can I Change My LLC’s EIN?
You can change your LLC's EIN only in certain circumstances.
Existing EIN can't be changed for tax-exempt organizations or if already used. Notify the IRS of changes with Form 8822-B. A new EIN is required for certain structural or tax election changes.
Can I Apply for an LLC EIN Number if I Am a Non-U.S. Resident?
You can apply for an LLC EIN if you are a non-U.S. resident, applicable to single-member and multi-member LLCs. This step is crucial for federal tax obligations and legal entity distinction.
LLC and EIN Number
The process of obtaining an EIN and understanding how it affects your business finances can be complicated if you are new to the world of LLCs.
The EIN is not just a number assigned to your company; it's the backbone of your business.
It provides information about where you are in the world and what kind of organization you have set up for yourself.
When obtaining an EIN for a new LLC, quite a lot goes into getting this done right, so we recommend consulting IncFile who can guide you through all steps necessary.
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References:
- https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
- https://www.chamberofcommerce.org/ein-lookup
