Filing for registration is not enough when making the first steps in business. Even with a simple business entity as LLC. You also need to make sure you understand and you are in compliance with state and federal tax laws.
Do I Need a Tax Number for LLC?
The EIN is used to identify your LLC as a business entity not only in your tax filings, but also in everything that has to do with your dealings with the agency. There are three situations in which you can find yourself as an LLC owner regarding EIN:
- Your LLC has more than one member or it has employees, regardless if they are hired full time or part time. In this case you need to obtain from the IRS an employer identification number also known as tax ID number or EIN.
- You are the sole proprietor of an LLC, business is going well and you are preparing to hire your first employee. In this case, you need a federal tax number.
- You are the sole proprietor, you have no employee and you are not planning to hire any time soon. In this case you can use your Social Security number or request an EIN which can protect you from identity theft to which you are exposed by using your Social Security number on forms that circulate to your clients and vendors.
Obtain Tax ID Number
Obtaining a Tax ID Number for your LLC is actually not difficult at all. You, or the person you authorized to apply for an EIN (if you choose not to do it yourself), can apply for the tax ID number by visiting the IRS website and use the on-line tool available for business entities that have as place of business the U.S. or U.S. Territories. There are a few simple conditions that you need to meet in order to apply for an EIN for your LLC:
- You need to have a Social Security number, EIN, or ITIN.
- The on-line form must be completed in one session (you can’t interrupt the session and then come back and continue it).
- No more than one person can apply for your EIN each day.
In completing the on-line application you will be required to give information about:
- The type of legal structure of your company (LLC is among the options you can choose)
- Number of members of your LLC
- The state where your business is physically located
- A reason for why you need the tax ID number (e.g. hiring employees)
- Your name and your Social Security data
After completing the application, the federal tax ID number will be immediately sent to you on-line.