Federal Tax ID For An LLC

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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:

  1. A federal tax ID is used for filing taxes, hiring employees, opening a bank account, and other business transactions.
  2. Multi-member LLCs and those with employees must obtain an federal tax ID.
  3. Obtain an EIN by filing Form SS-4 with the IRS.

Continue reading "Electing S-Corp Taxation for Your LLC"

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