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.
A tax identification number, or EIN, is necessary to open a business account or register for a business license. However, many entrepreneurs only vaguely recall registering for an EIN. Fortunately, recovering an EIN is a relatively simple process. First, you need to look for a letter that confirms that you have an EIN.
If you can’t find the letter, you can contact the IRS and ask for it. It is usually listed on public documents. You can also get the EIN from a financial institution or bank. Performing a search on an EIN is not difficult, but it does require a bit of time and patience.
Another option is to check your business credit reports. While these reports are not as secure as consumer credit reports, they do contain the EIN. You can also look up the EIN from your business’s previous tax returns. If you run a nonprofit, you may also want to check its IRS database.
If you cannot find your EIN by looking for the confirmation letter, you can try contacting the IRS. They have a dedicated line to help people with business-related issues. They are open seven days a week from 7 a.m. ET, and they will be happy to help. They will be able to provide you with your EIN over the phone. However, you should be prepared for long wait times.
Private companies usually won’t have their EIN available on their own website. However, you can ask employees or payroll departments to get the information. In addition to asking employees, you can even try paying for a company’s credit report. This option may be more cost-effective. You can also search a legal database for the EIN of a company.
An EIN can help you speed up the business process. It’s used in business transactions, such as applying for loans and applying for government permits. You can use this number to verify a company’s identity and verify tax information. You can also find the EIN number on a confirmation letter from the IRS. It is also found on old tax returns, payroll paperwork, and business loan applications.
Once you’ve received your EIN, you can use it for business purposes. The IRS won’t assign you the same EIN again in the future. But you can use the same EIN for another business if the company closes. It’s also important to keep in mind that a business’s EIN is unique.
Applying for an EIN is easy and free. All you need to do is provide your social security number or an acceptable Taxpayer Identification Number. The application process is fast and easy and usually only takes a few minutes. However, your wait time depends on how you apply. A nine-digit federal tax ID will be available to you shortly.
Once you have your social security number, you must fill out an application called the SS-4. This form is free and can be submitted online. Alternatively, you can fax or mail the form. However, faxing or mailing the application is often slower than online submission, and can take up to four weeks.
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.