Do I Need an Employer Identification Number for My Business?

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Every LLC business owner needs to have a social security number that can allow both the employers and the employees to file the taxes, deal with the payrolls, and many other functions. This unique number assigned to every Limited Liability Company business structure and the employees working under it is known as the EIN or the Employee Identification Number. Every LLC has a need for EIN, which is only issued by the IRS department of the US.

Need for EIN

However, you can’t file for the EIN unless the entire LLC business entity registration process is completed and you have the legal document stating the operations, business name, date of formation, and other attributes. Filing for the EIN is definitely easy since you will have the EIN assistant with you. But, before that, you have to understand the requirement of your LLC business and act accordingly.

When to Get an EIN for an LLC

Once your business corporation is established with all the attributes being mentioned clear in a legal document, all business owners will be able to apply for the EIN. But, before that, you will have to learn when exactly the EIN number is needed.

  1. If the business corporation has employees working under the parent name, it is essential for all business owners to submit an application for the EIN number since they will have to file the taxes and also check the payrolls.
  2. If your business corporation is multi-member based, the EIN number is essential since filing the tax returns, and the partnership report is not possible without the nine-digit number.
  3. If your business corporation is involved with the excising of the taxes on income, the IRS will ask for the EIN number of the notified taxpayer related to your business licenses.

Type of LLC Structures That Need EIN

Even though every LLC business structure will need the EIN, there are certainly exceptional cases where you won’t have to file for the number with IRS. Here, we have discussed when to file and when not to, based on the LLC business corporation type.

Sole Proprietorship LLC

If your LLC business is based on the sole proprietorship structure, you will have to file for the EIN only if you have employees working under the business name. However, if you are the only responsible party of the business, there is no need to file for the EIN. Also, since you will have the sole proprietorship with no other employees working, you won’t have to file the employee pension tax, and hence, there will be no need to file the EIN.

Single-Member LLC

For a single-member LLC, you will have two conditions as a responsible party. If the company has no working employees under the business name, no EIN number is needed, and hence, you won’t have to go through the hectic process of filing the application. But in case your single-member LLC has employees, it is essential to file for the EIN, no matter how many employees you have.

Multi-Member LLC

For the multi-member LLCs, you need to file the EIN number, regardless of the employees working in your company, as a responsible party. Even if there is no working employee, you still need to have the EIN because, whether their multiple members, the tax is calculated based on the individual partnership profit report. 

How Does an EIN Benefit an LLC

Truth be told, the EIN number acts as a specialized social security number for every LLC. It not only helps you in filing the taxes all the time but also manages the corporate veil and prevents identity theft. Since it is very important to have the EIN, we have explained here some of the perks of this number.

  1. Filing the taxes and avoid penalties

    All the businesses need to file various forms of taxes, starting with the sales tax, the income tax, the pensioner tax, and so on. Every LLC business will need the EIN number to file these taxes. Without it, you will get tax penalties, which might not be good enough for your business’s growth and tax purposes.

  2. Protecting your identity

    If you had to use the SSN number in your LLC business, high chances of identity theft would have developed. Since a unique number is needed for every financial transaction done by this type of business, you would have to use the SSN number frequently with no security. This is why having the EIN will help you to prevent the SSN number from getting public or, worse, stolen by hackers.

  3. Allowing you to maintain the corporate veil

    A corporate veil is a logical business structure that allows the members of the LLC to protect their personal assets with having no liability to pay off the company’s debts and resolve the lawsuits. To maintain this corporate veil, you will need the EIN number at the earliest for your business entity.

  4. Open the business bank account

    All the organizations need to have a separate bank account that will record all the transactions related to the LLC. With the EIN number in hand, you will be able to open the bank account easily.

  5. Get further business credits and easy loan approval.

    Sometime in the future, you may be needing a loan for which maintaining all types of business credit is essential. EIN will help you to increase the business credit and also acts as a catalyst and speeds up the loan approval against your business accounts.

How to Find Employer Identification Number

You can find the Employer Identification Number from computer generated receipts issued by the IRS. You can also search for it through the IRS helpline at 800-829-4933.

If you’re wondering how to find an employer’s Employer Identification Number, you’re not alone. Many businesses need this information to comply with the law. In fact, this TIN can be obtained easily with the help of past tax records. In addition, you can access online payroll records and tax software to find the employer’s EIN. Here are some tips for doing so. Listed below are some easy ways to locate an employer’s EIN.

To start a business, you’ll need to obtain an Employer Identification Number (EIN). This is a nine-digit identifier that’s issued by the Internal Revenue Service. It’s like a social security number for businesses. This number is also required for many financial transactions, including opening a bank account or credit card. The IRS requires businesses to obtain an EIN before they can hire employees.

After you obtain your EIN, you’ll need to apply for a business license or permit. Almost every government form requires you to include this number, including loan applications. If you’re a sole proprietor, your EIN may be stored at your bank or other financial institution. Fortunately, performing an EIN lookup is quick and easy. Follow the steps listed below to get the information you need. You may also need to get your EIN from the state’s employment tax agency.

The IRS limits the number of EINs that it can issue to each responsible party per day. This restriction applies to all types of EIN requests. Therefore, you should only submit one request per day to the IRS. We apologize for the inconvenience this may cause. After receiving your EIN, you can start applying for a business license, open a bank account, and apply for other business licenses. This information is crucial for a business to run smoothly.

To apply for a business license, you should complete Form SS-4, which is a requirement from the IRS. Form SS-4 has a table that will help you determine if you need an Employer Identification Number. You can also refer to IRS Publication 1635, which offers line-by-line instructions for filing forms. You can also find out the responsible party’s Federal Tax Identification Number by contacting the Internal Revenue Service.

It is possible for a business to have multiple Employer Identification Numbers for different states. However, businesses generally only have one EIN. If you’re a sole proprietor without employees, there’s no need to get an EIN. However, if you’re a contractor, it is a good idea to get an EIN as a way to protect your business from identity theft. Using the IRS questionnaire is helpful.

In addition to being useful for business purposes, an EIN is also a necessary document for many other reasons. You can use it to apply for a business license, open a bank account, file a tax return, and more. If you’re a sole proprietor, you can use your Social Security number as your tax ID, but if you run a business that employs employees, you’ll need an EIN.

How to Apply for an EIN

In order to apply for the EIN online application, you need to visit the official website of IRS, where you will get the EIN assistant. With the help of the assistant, you can easily file for the 9-digit ID numbers, and it will be displayed to you once the form is submitted with all the correct details. Try the application by mail or fax the EIN application form with other required documents to the IRS in case you are not in an emergency. For better knowledge, hiring an attorney will help you plan everything related to the EIN forms.

In Conclusion

Employer Identification Number is an essential thing when you start your business. You may be wondering if your LLC needs to obtain an EIN or not. Yes, it is a mandatory requirement for any LLC to obtain EIN. If you have hired an LLC formation service provider then you do not need to worry about the EIN, they help you with that. But if you haven’t hired anyone yet, then you can apply for EIN by yourself through the IRS portal.

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