All Your Questions About EINs Answered
What Exactly Is an EIN?
An Employer Identification Number (EIN) is like a Social Security Number but for a business. It’s used to do things like:
- Track all financial and tax activities of your business
- Open a business bank account or credit line
- File your taxes
- Verify your business’s identity
Your EIN is also separate from social, so you can use it to maintain your privacy when filling out forms like a W-9 (always a plus).
Can Any Business Structure Get an EIN?
You do not need an LLC or Corporation to get an EIN. This is a common misconception. Sole proprietors are eligible to obtain an EIN, and in some cases, they actually must get one.
Where Do I Get My EIN?
You can get an EIN online here. It’s actually super easy to fill out!
If you don’t want to fill out an online application, you are more than welcome to fill out the PDF (from the link above) and mail it into the IRS.
Alternatively, you can call the IRS directly (probably not the best move if you know anything about calling them lol) at (800)-829-4933.
How Does an EIN Work For My Business Structure?
There are a few different situations that could arise when obtaining an EIN depending on your business. Let’s break them down one by one, shall we?
So, you don’t technically need an EIN as a sole proprietor however, it’s really handy to have if you don’t want to give out your social when filling out business forms.
If you want to hire employees, you are required by the IRS to get an EIN.
Sole Proprietors with a “Doing Business As” (a.k.a. DBA)
Your DBA is kind of like your business’s nickname. When you get an EIN as a sole proprietor with a DBA, your full government name is listed as the legal business owner with your DBA as the name your business goes by. So, again, it’s not necessary for you to have an EIN in this case.
Limited Liability Companies (LLC)
If you run a single-member LLC, you don’t need an EIN unless you want to hire employees or if you are required to file an excise tax return (spoiler alert – you probably don’t have to fill out an excise tax return). Check with your tax professional if you’re unsure.
Even though LLCs are not required to have an EIN, we’ve never seen an LLC that did not have an EIN.
If you have a multi-member LLC, you must have an EIN.
LLC taxed as a Corporation
If you’d like your LLC to be taxed as a corporation, you’ll need an EIN to file your taxes.
Partnerships must apply for EINs, whether you have employees or not. Period.
Corporation taxed as either an S-Corporation or C-Corporation
Corporations, regardless if they file taxes as an S-Corp or a C-Corp will need an EIN.
Please reach out, we’d love to help!
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Countless assumes no liability for actions taken in reliance upon the information contained herein.