LLC Ein Number: What Is It & How to Get One?

The authorization ensures that you have an individual to represent you or your business before the IRS in matters related to federal tax. This includes submission of form SS-4 to obtain an EIN for a non US business. Enabling tax and accounting professionals and businesses of all sizes drive productivity, navigate change, and deliver better outcomes. With workflows optimized by technology and guided by deep domain expertise, we help organizations grow, manage, and protect their businesses and their client’s businesses. Foreign companies that need to file tax returns in the US also need to have EIN as well.

Each application must designate a “responsible party” who must be an individual, not a business entity. The responsible party is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity. And importantly, all EIN applications must disclose the name and Taxpayer Identification Number of the true principal officer, general partner, grantor, owner or trustor. There are even a few business credit cards that don’t require a personal credit check, though most do. All legally formed businesses with employees can submit an online EIN application, including sole proprietorships, partnerships and LLCs.

When Does a Sole Proprietor Need an EIN?

If your business is a partnership, a multi-member LLC, or if you have employees, an EIN is required in order to file taxes. It is the identification you will use when you file your company taxes with the IRS at the end of the year. Every financial decision made on your business’s behalf will be tied to its EIN. If you apply for one as soon as possible, you won’t have to deal with the risk of missing tax deadlines.

• Use our research to quickly and easily find the right account for your business.
• You may discover later that you need one – mainly if you plan to expand or restructure your business to a corporation and/or hire employees.
• The responsible party is the person who ultimately owns or controls the entity or who exercises ultimate effective control over the entity.
• Visit our What is an EIN guide to learn more about when you are required to have an EIN and how to get one.
• You’ll also need an EIN to get a business credit card or open a business bank account.
• The ITIN or Individual Taxpayer Identification Number is a tax processing number that is issued by the Internal Revenue Service .

The Social Security Administration issues them at birth or to adults that successfully immigrate. When you file your federal income tax returns, this number distinguishes you from others who might happen to have the same name. Just like a Social Security number tracks your personal credit, lending and credit agencies use an EIN to track your business’s credit. Establishing strong credit will help to maintain your business’s financial stability, and applying for an EIN is an essential step. Having good business credit can lead to better interest rates, more loan qualifications, and a higher chance of expanding your company in the future.

International EIN Applicants

We recommend waiting to apply for an EIN until you’ve formed your business. Our LLC before EIN article explains why and will help you get started. An Employer Identification Number , or Federal Tax ID Number, is like a social security number for your business. The EIN allows the IRS to keep track of a business’s tax reporting. A new EIN assigned to your business will automatically replace your old EIN, and the old EIN will become inactive and not be reissued.

When readers purchase services discussed on our site, we often earn affiliate commissions that support our work. You aren’t required to use any particular title, but you do need to make sure that the title you choose is appropriate and doesn’t mislead anyone. Be sure to meet your tax obligations as you move forward with your new LLC company. Now that you can see the advantages and ease of obtaining an EIN, acquiring an EIN should be one of the first steps you take when creating a new business. Plus, for certain types of tax deductions, such as home office deductions, your chances of an IRS audit decrease if you have an EIN.

How to Apply for an Employer Identification Number (EIN) for Free

A new LLC with more than one owner (Multi-member LLC) is formed under state law. Filling out the paperwork for your EIN can take 10 minutes or less, if you are prepared. How long it takes to get the number back, however, will depend on how you submit your information.

Though most trust agreements are commonly reported under the SSN of one of the trustees, some individuals and families with a trust may opt to have a separate EIN altogether. Estate accounts (generally established after an individual’s passing for the distribution of assets) will also require an EIN, separate and apart from the decedent’s SSN. Like a social security number, it’s important to protect your EIN. Criminals might attempt to make fraudulent credit applications with this code.

Privacy Protection and Federal Tax Identification Numbers

The IRS needs to identify what is an ein number or individuals applying for the employer identification number. To apply by fax service, you will need to fill in Form SS-4, available on the IRS website. Finally, you’ll need an EIN if you want to hire employees for your LLC. Without it, you’ll be limited to hiring an independent contractor only. Even if you own a single-member LLC or a multi-member LLC with employees, you will need a federal tax ID. Even if your LLC is inactive, your federal tax identification number remains active.

• For this reason, it’s wise to keep your personal Social Security number as private as possible.
• Boost credibility.An EIN establishes you as a serious, responsible person who’s committed to your business.
• While new businesses often apply for EINs, it’s also possible that an established business will need to get one if, for example, it hires its first employee.
• It is issued by the IRS, for reporting taxes, obtaining licenses, and other validations.
• Each chapter of a national non-profit organization must have its own EIN, but the central organization may file for a group tax exemption.
• Visit the IRS website for a detailed list of business entities that need an EIN.
• No, there is not a difference between an Employer Identification Number and a Taxpayer Identification Number .

In the event the owner or legal information needs to change, you will have to file the correct paperwork to update/change your EIN. Business entities—corporations, partnerships, and limited liability companies—must use EINs. But most sole proprietors don’t need to get an EIN and use their Social Security numbers instead.