LLC Tax Identification Number

When Do You Need a Tax ID Number for an LLC

Once you’ve determined your new or existing LLC needs its own tax ID number, it’s time to apply for your Employer Identification Number (EIN). The process only takes about 15 minutes if you follow these step-by-step instructions to complete the IRS online application. With some basic information about your LLC ready, you’ll breeze through getting your EIN assigned instantly.

Wondering if your new or existing LLC actually needs its own tax ID number? Here are some common scenarios that require an EIN:

• You plan to hire employees. An EIN is required if your LLC will have employees. This includes single or multi-member LLCs.
• You have multiple members. Multi-member LLCs with two or more owners need a tax ID number, even if you don’t have employees.
• You open a business bank account. Banks will require an EIN to open an account in your LLC’s name.
• You operate as a corporation for tax purposes. If you file taxes as an S corporation or C corporation, you’ll need an EIN.
• You withhold taxes on payments. If you need to withhold taxes on payments made to non-US owners or partners, get an EIN.
• You pay employment taxes. An EIN is required if you pay Federal employment taxes like Medicare or Social Security.

As you can see, most LLCs will need their own tax ID number at some point. We recommend applying early on so you have it when the need arises.

A single-member LLC is the only scenario when getting an EIN is optional. The business owner can choose to operate under their Social Security Number instead. However, there are risks to using your SSN for business purposes. Getting your own EIN adds an extra layer of protection and credibility.

How to Get a Tax ID for Your LLC

Now that you’ve decided to get an EIN, let’s cover the application process step-by-step.

The fastest, easiest way to get your LLC tax ID number is to apply online at IRS.gov. Here’s how it works:

Step 1: Gather Information

You’ll need the following information handy to complete the online EIN application:

• LLC’s legal name and any trade names
• Physical business address
• Mailing address (if different)
• LLC’s state and date of formation
• Names, titles, and SSNs/ITINs of all owners/members

Step 2: Visit IRS.gov and Begin Application

Go to IRS.gov and search “apply for an EIN online.” You’ll be walked through a short interview-style application. Make sure to have the above information ready.

Step 3: Select Your LLC Type

You’ll need to indicate that you are applying for an EIN for a limited liability company, not another entity type.

Step 4: Provide Your Personal Info

Supply your name, SSN/ITIN, title, and ownership percentage. For single-member LLCs, there will only be one owner to provide info for.

Step 5: Enter Your Addresses

Supply both the physical and mailing addresses for your LLC. If they are the same, you can indicate that.

Step 6: Describe Your Business Activities

Briefly describe what your LLC does (e.g. consulting, retail, etc.). This helps the IRS classify your business activities.

Step 7: Submit Your Application

After reviewing all the supplied info, submit your completed EIN application!

The entire process usually takes 15 minutes or less. Once submitted, your EIN will be assigned immediately and you can download, save, and print your confirmation letter. It’s that simple!

If you prefer to apply by phone, you can call 800-829-4933 and speak with an IRS representative to complete the process. However, applying online is faster.

6 Tips for Applying for an LLC Tax ID

Applying for an Employer Identification Number (EIN) to get your LLC tax ID is quick and easy, especially when you use the streamlined IRS online application. To ensure the process goes smoothly, follow these 6 tips when obtaining your EIN. Having the right information prepared ahead of time and double checking everything allows you to get your tax ID number instantly without any issues.

Follow these tips to ensure your LLC’s tax ID application goes smoothly:

Apply only once your LLC is officially registered with your state.

• Use your LLC’s exact legal name, including suffix (e.g. My LLC Name, LLC).
• List your SSN, not the EIN you’re applying for.
• Only apply once per day. You can’t submit multiple EIN applications simultaneously.
• Double check information before submitting to avoid processing delays.
• Save confirmation letter from the IRS assigning your new EIN.

With an online application taking just 15 minutes, getting your LLC tax ID number couldn’t be much easier.

How an LLC Tax ID Number Is Used

Once you successfully obtain your EIN, how will you actually use it? Here are some of the key ways your LLC tax ID will be utilized:

• Open a business bank account – Banks require an EIN to open an account for your LLC.
• Apply for business licenses and permits – Many licensing applications will ask for your EIN.
• Pay taxes – File taxes and pay estimated quarterly taxes using your new tax ID.
• Hire employees – If you plan to hire staff, you’ll need to provide an EIN.
• Apply for business loans/financing – Lenders often require an EIN to lend to an LLC.
• Work with vendors/suppliers – Vendors may request your EIN when establishing accounts.
• Claim tax deductions – Use your EIN to claim rightful business deductions.
• Obtain an LLC credit card – Get a card to separate personal and business spending.

In short, your LLC’s EIN serves as its official business identification number both for tax purposes and general business operations.

Tax ID vs. Social Security Number for an LLC

As a single-member LLC, you may be wondering if you should use your Social Security Number instead of getting an EIN. Here are some key differences:

• An EIN creates separation between you and your business for liability purposes.
• Your Social Security Number exposes you to potential identity theft if misused. An EIN offers more protection.
• You can’t hire employees with only an SSN. Getting an EIN is required if you plan to hire staff.
• Most lenders require EINs, not SSNs, to lend money to a small business.
• Suppliers, vendors, and partners may insist on an EIN for your LLC instead of using your personal SSN.

While it is an option, using your SSN instead of getting an EIN for your LLC has risks. Plus, EINs are free and easy to get. We recommend taking a few minutes to obtain your unique tax ID number.

Renewing or Revoking an Existing LLC Tax ID

What if your LLC already has an EIN but you need to make changes to it? Here are some scenarios where that may occur:

Renewing an EIN

LLC tax ID numbers do not expire and never need renewal. The EIN assigned to your business will stay the same going forward.

Updating your EIN

If your LLC’s legal name, address, or ownership structure changes, you can update this information associated with your EIN by filling out IRS Form 8822-B. Most changes won’t require getting a new EIN.

Revoking an EIN

If your LLC goes out of business, you should revoke your EIN by submitting IRS Form 8822-B. This notifies them your EIN is no longer needed.

Getting a new EIN

In rare cases, such as identity theft/fraud related to your existing EIN, you may need to obtain a new one. You’ll have to contact the IRS directly if this occurs.

Conclusion

We hope this guide gave you an easy-to-understand overview of LLC tax identification numbers! As you can see, getting an EIN is important for the success of your new business and involves a quick, painless application process.

Most LLCs should take a few minutes to obtain their own tax ID number as one of the first steps when forming their company. Doing so sets your business up for smoother banking, taxes, hiring, compliance, and operations. Don’t wait until the last minute to get this essential identification number!

Visit the IRS EIN Assistant tool or call 800-829-4933 to receive your tax ID today. Your LLC will operate more smoothly and professionally with its own dedicated EIN!