What is an EIN? EIN or Employee Notification Number also goes by the name of FEIN or Federal Employer Identification Number, and FTIN or Federal Tax Identification Number. It is a nine-digit number assigned to every LLC business entity for tax filing and reporting purposes. The issuing government body is none other than the IRS or Internal Revenue Service of the US.
On this page, you’ll learn about the following:
Does an LLC Need an EIN?
Yes, it is mandatory for all LLC corporation businesses to obtain the EIN number sooner than later. Once you complete all the steps of forming the LLC, you can submit the EIN application to the IRS department.
Based on the business structure, the requirement for the LLC EIN number will vary. Here, we have described the three most common LLC business types and their requirements for obtaining the EIN.
For the sole proprietorship business structure, the EIN number will not be needed if the company doesn’t have any employee or is not involved in filing the pension tax returns. But, if your sole proprietorship LLC has employees working in it, the EIN number is mandatory.
For the single-member LLCs, you won’t have to get the EIN number in case the company is void of employees or does have the excise tax liability. But, if you have employees or are planning to have some in the future, you need to get the unique number beforehand.
For multi-member, since you wouldn’t have the sole authority of the LLC, you need to have the EIN number for filing the partnership profit returns.
When Will the IRS Ask for an EIN?
Since all the taxation documents and reports are filed with the IRS, the government body will ask you about your EIN under certain circumstances. Here, we have discussed the occasions when you will have to display the number.
- If your LLC has employees, EIN is mandatory for tax filing and business tax returns.
- For the multi-member LLC organizations, EIN is a must draw the partnership return files.
- EIN is also asked when the Limited Liability Companies have excise tax filings.
How to Request for an EIN?
Before you request the EIN, you need to complete the formation of your LLC. Once the procedures are completed, you can move onto the filing process of the EIN. For this, you need to submit all the details to the IRS, including the type of business structure, the purpose of the EIN, business formation date, and other such information pieces.
Following are the requirements you need to fulfill at the time of submitting the EIN application to the IRS:
- According to the online application process, the form must have the taxpayer’s name, taxpayer identification number, and the social security number of the general partner, the grantor, or the principal officer.
- The responsible party to manage all the notifications, meetings, and future procedures must be an individual for a private LLC.
Why Should the LLC Get the EIN?
You can enjoy several benefits once you get your EIN number. It will give your LLC business the last trump card to function on full mode without having to face any legal or judicial problem. Here are the further details of having the EIN after the formation of LLC.
Helps in filing tax returns
First of all, with the EIN number, you will be able to file the tax returns easily with the IRS. In fact, all the business finances done by your LLC will be supervised with the EIN only, and hence, this will allow you to file the taxes properly without a miss.
Needed for hiring employees
For hiring the employees, all employers will need individual EIN numbers so that their payrolls can be set up every month. As for the business EIN, IRS will need this number for tracking the employee payroll taxes.
Maintains the corporate veil
With the EIN number, the LLC members will be able to protect their personal assets in case the business has been sued, or someone has raised a lawsuit. This is what a corporate veil means, which is essential for every LLC business.
Prevent any occasion of identity theft
For operating all the taxations and finances of your LLC, you will use the EIN. This way, your social security number can be kept safe from identity theft.
Helps in opening a business bank account
Since after forming the LLC, you will have to open business accounts, you will need the EIN number for the same. Also, for getting business credits and business licenses, you will need this nine-digit unique ID.
How to Find My EIN Number
You can find the EIN from tax return documents, from you bank account details (if used at the time of set up). You can also search for it through IRS helpline at 800-829-4933.
Whether you are just starting out in business or are a seasoned veteran, there may come a time when you need to know how to find your EIN number. You can apply for an EIN by mail, telephone, or online, and the process is relatively easy and fast. However, if you are missing your EIN, you can face real ramifications for your business.
In general, your EIN is like your social security number for your business. It’s used for many purposes, including filing taxes and getting financing for your business. If you don’t have it, you may find it difficult to get financing or open a business account. Therefore, you need to be prepared to act quickly if you have to apply for an EIN.
The first place you should look for your EIN is in your previous tax returns. You might find it listed on the About page of your company’s website. Or, you might see it listed on the signature line of your company email address.
Another good place to start is with the IRS. This agency provides the EIN, which is also called a federal tax ID number. You can call the Business and Specialty Tax Line, which is available 7 a.m. to 7 p.m. ET, or you can fill out Form SS-4, which is available for download on the IRS website. While it isn’t necessarily the easiest to obtain, the IRS should be able to provide you with an EIN.
Your accountant might have some sage advice when it comes to finding your EIN, too. He or she might suggest contacting the institution where you have shared your EIN in the past. But don’t go there alone, as you might wind up with a road block.
If you don’t know what to do, you can ask the accountant of another business for an EIN. That should be the simplest, easiest, and most cost-effective way to get an EIN. They may also know about other ways to help you locate your EIN, too.
To make it easier for you, the IRS offers several tools for retrieving your EIN. Using a fax machine or a computer, you can print out Form SS-4 and fax it to the appropriate fax number. When you do, you will receive an EIN in as little as four days.
Similarly, the IRS can also provide you with an EIN over the phone. Just be sure to have a valid phone number, as you will have to wait for a representative to verify your identity.
As a final tip, if you don’t have access to a tax professional, it’s best to stick with the IRS, which should be able to provide you with an answer without any hassles. And while you’re at it, make sure you know about the different types of tax information the IRS can provide, too.
From there, you should be armed with the knowledge and resources you need to succeed.
Can I Get a Free EIN?
If you want your EIN sooner and that also without having to pay any type of fee, you need to sign up with the EIN assistant at IRS and follow the entire procedure for application. Only the US-based citizens can apply for the EIN number with the IRS. Also, you can only submit one application in a day. Once the entire form is filled and submitted, your EIN number will be displayed. As for applying via mail or fax, you need to download the SS-4 form and fill up the details before submission.
EIN is needed when you have employees in your business. If you are hiring an LLC service provider then EIN would be obtained by them on your behalf. However, if you want to obtain it by yourself then apply through the IRS. EIN is required to file your business taxes. You can also search for why you should obtain EIN on this site.