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.
Getting an EIN (Employer Identification Number) is a must for most businesses. It helps you keep your business and personal finances separate. It also helps you secure business financing and credit cards. If you do not have an EIN, you may have trouble opening up a business account or receiving payments for your products or services.
Getting an EIN isn’t hard. You can use the IRS’s Business and Specialty Tax Line, which operates from 7 a.m. to 7 p.m. ET, or you can call your local IRS service center. A faxed application should be answered within four business days. You may be able to get your EIN through the mail, but this process may take longer.
You can also get an EIN through your bank or financial institution. They may have saved your EIN or you may be able to get it from an employee who is familiar with EIN requests. They may also have a database of EIN numbers for businesses in their community. Some companies charge a fee for accessing their EIN databases. If you are a private company, you may not have access to their database.
There are also a few websites that offer EIN lookups. These sites may be more useful if you are looking for information about a business you don’t own. These sites offer free access to EINs for publicly traded companies, nonprofits, and other organizations.
You may also be able to obtain an EIN by mail, but this method takes about four weeks. In the meantime, you may want to call your local IRS service center to see if they can help you with your EIN search. You may also want to check with your local state department of commerce.
Another trick is to find out if your previous business tax return contains an EIN. You may be able to find an EIN on your old tax return, but you may not be able to locate the exact number. You may also be able to find the number on your business credit report. If you do not have access to your credit report, you may want to look into a business credit report agency. These agencies are typically bigger and more legitimate than your local credit union.
You may also want to look for an EIN confirmation letter, which is an official IRS document. This letter should confirm that you have the correct EIN for your business. It may even show you a few other identifying details about your business. It should be easy to find, but you should be prepared to provide some proof of identity.
The IRS has a helpful questionnaire that can be used to learn more about your business. This includes details on your business formation and tax filings, which may include your EIN. There are also tax-related documents you may be able to receive by email. It’s important to note that the CP 575 notice and other tax-related documents can be issued digitally or via fax.
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.