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
Performing an employer identification number (EIN) lookup is simple. You can start by examining your previous tax returns and legal and financial documents. Many business documents will display your EIN, which you can copy and paste into search engines. You can also check your mailbox as IRS sends many tax-related documents to your address through email and physical mail. This confirmation will tell you if you have an EIN or not.
Alternatively, you can visit the IRS website to verify your EIN. Once you have submitted the required information, the IRS will run a series of verification questions and issue a report. This may take up to 14 hours. Otherwise, if you’re looking for an EIN for a private company, you’ll have to contact a person with a connection to the company, like an accountant. However, if you’re not affiliated with the company, you can still perform a reverse EIN lookup to determine the company associated with your EIN.
Before you apply for a business credit line, you’ll want to get a copy of your EIN. This is important for a variety of reasons. First, you need to make sure you’re authorized to receive the EIN. You don’t want other businesses to use your EIN in the future. Additionally, a business’s EIN stays with it. If a company closes down, they’ll no longer be able to receive an EIN.
After locating your EIN, the next step is to contact the IRS. While the IRS provides free information on EINs, many companies charge for this service. These services may be useful if you need a large number of EINs, which is common for people in the legal and insurance industries. In addition, you may need to look up an EIN for vendors to accept your company’s payments. Another way to find your EIN is to get a copy from a public company’s website.
If you’re new to business, you might have forgotten to register your EIN for a specific state. You’ll need this to apply for a business license in a new city or register for a payroll loan. A business’s EIN can also be found on old tax returns, business loan applications, and payroll paperwork. You should always keep your EIN safe and secure. Your EIN will remain with your business for its entire life, so it’s vital to protect it.
You might need to get an EIN if you’re a business without employees. This is because it will keep your personal and business tax accounts separate. Moreover, you may need it to open a business bank account or apply for business licenses. Businesses without an EIN will need to use an SSN for tax documents. Regardless of whether your business needs an EIN, you can get one by applying for it using your SSN or ITIN.
To begin with, your business’s EIN isn’t necessarily printed on its documents. The IRS will have sent your business an automatic notice when you first applied for an EIN, but a business may have received an email instead. Once you have an EIN, you can then use it to find out what business that you’re dealing with. This way, you can verify the validity of the business’s EIN.
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.