EIN Meaning – What Is Employer Identification Number?

Steve Goldstein
Steve Goldstein
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What is an EIN: EIN or Employer Identification Number, or FEIN (Federal Employer Identification Number), is a nine-digit number assigned to every LLC in the United States. EIN is also called FTIN or Federal Tax Identification Number. EIN is issued by Internal Revenue Service (IRS). It does not cost any money to obtain EIN.

Businesses use EIN to file taxes. EIN is a unique number all businesses receive from IRS to file various business taxes. In this article, you will read about how to get EIN from IRS or otherwise.

Does an LLC Need an EIN?

Yes, all LLC corporation businesses must obtain the EIN sooner than later. Once you complete all the steps of forming the LLC, you can submit the EIN application to the IRS department. There are various LLC formation services that provide EIN without any hassle.

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.

Sole Proprietorship: For the sole proprietorship business structure, the EIN number will not be needed if the company has no 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.

Single-Member LLC: For single-member LLCs, you won’t have to get the EIN number in case the company is void of employees or does have an excise tax liability. But, if you have employees or plan to have some in the future, you need to get the unique number beforehand.

Multi-Member LLC: 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 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 an EIN?

Before you request the EIN, you must complete your LLC’s formation. Once the procedures are completed, you can move on to 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, the 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, identification number, and 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 in full mode without having to face any legal or judicial problems. Here are the further details of having the EIN after the formation of the 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.

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.

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.

However, if you’ve misplaced or forgotten your EIN number, there’s no need to panic. There are several simple ways to retrieve this important information.

One option is to check your EIN confirmation letter. When you applied for an EIN, the IRS would have sent you a letter confirming your new identifier. This letter typically includes your EIN number along with other vital details about your business. If you have a physical or digital copy of this letter, locating your EIN number should be a breeze.

If you can’t find your EIN confirmation letter, you can also reach out to the IRS directly. The IRS has a special helpline (1-800-829-4933) dedicated to assisting individuals with EIN-related inquiries. Be prepared to provide necessary information such as your business name, address, and other identifiable details. The IRS representative will help you retrieve your EIN number and may also send you a new confirmation letter if needed.

Another option is to check any tax documents or forms filed with the IRS. Your EIN number should be listed on various tax returns, applications, and other official documents related to your business. Reviewing these papers can help you locate your EIN number without having to contact the IRS.

For those who prefer online solutions, the IRS offers an EIN Assistant tool on its website. By answering a series of questions about your business, you can retrieve your EIN number instantly. This convenient online tool is user-friendly and accessible 24/7, making it an ideal option for busy entrepreneurs.

In some cases, you may need to request a new EIN number if you’re unable to locate your original one. However, it’s essential to note that each business entity is only allowed to have one EIN. Applying for a new EIN when you already have one can lead to confusion and potential legal issues. It’s best to exhaust all other options before considering this step.

In conclusion, finding your EIN number doesn’t have to be a cumbersome task. By utilizing the methods mentioned above, you can quickly retrieve this critical identifier and continue managing your business efficiently. Remember to keep this number in a secure place and update your records regularly to avoid any future issues. Having easy access to your EIN number will streamline your business operations and ensure compliance with IRS regulations.

In Conclusion

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.

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