An Employer Identification Number (EIN) is a nine-digit number issued by the Internal Revenue Service (IRS) for tax purposes. Despite the “Employer” in its name, however, EINs aren’t restricted to only those businesses that have employees.
This means your LLC might need to apply for an EIN. Whether or not you need an EIN depends on whether your LLC fits the criteria set out by the IRS for businesses that are required to obtain an EIN.
Do You Need to Apply for an EIN for Your LLC?
If your LLC is a multi-member LLC, your LLC will need to get an EIN. This is because the IRS taxes multi-member LLCs as either partnerships or corporations, and all partnerships and corporations are required to get an EIN.
But if you’re running a single-member LLC, you may not need to get an EIN. Your LLC will be required to obtain an EIN if it:
- Has employees
- Is operated as a partnership or a corporation (this includes choosing to have your LLC taxed as a corporation)
- Files any of the following tax returns:
- Employment return
- Excise return
- Alcohol, Tobacco and Firearms return
- Withholds taxes on any income (other than wages) to a non-resident alien
- Has a Keogh plan
Your LLC will also need an EIN if it’s involved with any of the following organizations:
- Trusts (note that there are certain exemptions)
- Real estate mortgage investment conduits
- Non-profit companies
- fFrmers’ cooperatives
- Plan administrators
How to Apply for an EIN for Your LLC
You can apply for an EIN for your LLC in any of the following ways:
Internet EIN application. Applying online is generally the quickest way to get your EIN. Once your application is completed you will get your EIN immediately, provided the information you’ve provided during your application session has been validated.
Fax application. In order to apply via fax, you’ll need to download and fill out Form SS-4. Once you’ve completed your application, you can find the fax number to fax it to here.
Mail application. You can also mail in your EIN application. You will need to download and fill out Form SS-4. Once you’ve completed your application, you can find the address to mail it to here.
The IRS does not charge a fee for issuing EIN numbers, so you won’t need to provide payment information or send in a check.
Other Benefits of an EIN
Many businesses make the decision to apply for an EIN even if the IRS doesn’t require them to. Here are some of the reasons why you might want to get an EIN for your LLC even if it’s not required:
- Business bank account. Some banks won’t let you open up a bank account for your business unless your business has its own EIN. If that’s the case with your bank, you’ll need to get an EIN for your LLC even if the IRS doesn’t require you to.
- Bank loans. If you’re in need of bank financing for your LLC, you’ll probably need an EIN in order to apply for a loan. Individual banks’ requirements will vary, but most banks want an EIN for loan applications, so check to see what your bank’s policies are.
- Privacy and credibility. Having an EIN can make you look more credible in the eyes of the third parties your LLC deals with. It also gives you more privacy, because you can use your LLC’s EIN on various business documents and applications instead of your own Social Security number.
Starting a Business? Our Springfield Business Lawyer Is Here to Help
Starting a new business can be a crazy, chaotic time for an entrepreneur. Parks & Jones is here to help. Contact us to speak with an experienced Springfield business lawyer who can help you get your new business off to a good start.
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