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.
As a business owner, it can be confusing to navigate through the bureaucracy of government regulations. One of the many questions that entrepreneurs often face is how to find their Employer Identification Number (EIN). Whether you’re a seasoned business owner or just starting, understanding what your EIN means and how to find it is important.
An EIN is a unique identifier assigned by the Internal Revenue Service (IRS) to businesses in the United States. Think of it as a social security number for your business. It’s used to track and monitor tax obligations, including payroll taxes, income taxes, and other business-related taxes at the federal level.
When it comes to figuring out where to find your EIN number, the first place to look is the paperwork that you received when you first registered your business. Your EIN will be included on all the documents you received from the IRS when you applied for your employer tax ID number.
For example, if you apply for an EIN online, you can print and save the confirmation letter that contains your EIN number. In contrast, if you filed for your EIN via mail, you will have received a letter in the post with your unique identifier printed on it.
Likewise, it’s always an excellent idea to store the EIN number securely – a safe place that’s easy to retrieve it from, such as your tax software. On the occasion when you forget or lose your EIN number, you’ll need to track down the documents to avoid having to apply for a new EIN. Otherwise, you’ll be paying a lot of interest and penalty fees (not cheap charges by any means!).
In the event that you can’t locate your documentation electronically, there are some additional steps you can take. If you have an online account with the IRS, log in and download your business tax filing forms. Your EIN will be included along with your other tax identification information. If you already filed your business taxes and included your EIN in your filings, you might also be able to find the information on the copies you filed with the IRS.
Another option is to reach out to your bank. When you applied for a business account, you likely had to provide your EIN number, and the bank may have documentation on file related to your business tax ID. Most financial establishments ought to be of valuable assistance on offering expertise on navigating legit pathways to recover your EIN number so make use of straightforward communication.
In conclusion, finding your EIN number isn’t difficult, so long as you have the right information readily available. Keep copies of your business regulatory paperwork (including references to EIN numbers). Store this information securely, allowing ease of retrieval when assistance on whether or not the business EIN is required, or on tax filings when skipped off the memory offhand. Noticing one small issue with documents or data is beneficial to avoid incurring unnecessary fees and disastrous company reputation. Unclear and dishonorable outcomes on taxes may prompt alarms, fees, disadvantages, and decline of career reputation.
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.
1 thought on “EIN Meaning – What Is Employer Identification Number?”
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