Federal Tax ID For An LLC
LLCs obtain a federal tax ID as part of starting business, hiring employees, or when a single-member LLC takes on a second member.
What is a Federal Tax ID (EIN)?
A federal tax ID is like the Social Security Number for your business. An LLC’s federal tax ID number is used for reporting taxes, opening a bank account, and hiring employees. It is also called an Employer Identification Number (EIN), but don’t let this name fool you - an EIN is not just for employers.
Does your LLC need a Federal Tax ID (EIN)?
- All multi-member LLCs must obtain a federal tax ID.
- Single-member LLCs must obtain a federal tax ID if they have employees.
- Other single-member LLCs can use their SSN in place of a federal tax ID. They may optionally obtain a federal tax ID for the privacy of not using their SSN during business transactions.
These guidelines cover the most common situations, for full guidelines see “Do I Need an EIN?”.
How does an LLC get a Federal Tax ID (EIN)?
An LLC obtains its federal tax ID number from the IRS by filing Form SS-4. There is no government fee for filing. You may file by mail, fax, phone, or online
Key Takeaways:
- A federal tax ID is used for filing taxes, hiring employees, opening a bank account, and other business transactions.
- Multi-member LLCs and those with employees must obtain an federal tax ID.
- Obtain an EIN by filing Form SS-4 with the IRS.
