Federal Tax ID Number

Your LLC’s Federal Tax ID Number (EIN)

**Short Answer: A Federal Tax ID Number is to a business what a Social Security Number is to an individual. It’s used for taxes & banking and it also identifies your company to the IRS.**


Video Transcript:

A federal tax ID number is issued by the IRS to business entities. A federal tax ID number is also known as an EIN or Employer Identification Number. For simplicity, we will refer to it as the EIN. The EIN is to a business what a Social Security number is to an individual. It basically identifies your business to the IRS. Even though it’s called an Employer Identification Number, it doesn’t mean that you have to have employees. EINs are used for opening business bank accounts, filing taxes, handling payroll if applicable, obtaining business lines of credit or business loans, obtaining credit cards in the name of the LLC, and applying for some business licences. You must wait until your LLC is approved by the state before obtaining your EIN. You do not want to have any issues with an EIN assigned to the wrong LLC. Dealing with the IRS to cancel an EIN is a pain in the neck. An EIN is similar to a Social Security number in that it has nine digits. To differentiate an EIN from an SSN, there are two digits, followed by a hyphen, and then seven more digits. For example, 68-3302819. How much does an EIN cost? An EIN is free. No, really. They’re completely free. You can obtain an EIN from the IRS. Unfortunately, many websites charge $50 to $100 for this. So how can you obtain your EIN? They can be obtained in three ways: by mail, by fax, or via the IRS’s online questionnaire. By fax takes four days. Too long. An EIN by mail can take up to four weeks. Way too long. But the EIN by online application takes fifteen minutes. Your EIN will be issued immediately after you answer all of the questions in the online application. You’ll then be able to save and print your new EIN as well as your confirmation letter. Make sure to save copies of these and keep them with your LLC documents. You’ll need to have the member’s SSNs or ITINs ready before you begin the online application. If you’re a US citizen, you’ll use your SSN, Social Security Number. If you’re a foreign national, you’ll use your ITIN, Individual Taxpayer Identification Number. If you’re a foreign national, and you do not yet have your ITIN, you will first need to apply for one before getting your EIN. If you need to apply for your ITIN, please contact the IRS. How do you get the online application? Well, you have a few options. You can pay a website to get your EIN, although it’s actually free so why would you do that? You can go directly to the IRS.gov website and fill it out yourself, or you can watch a step-by-step video and learn how to navigate the IRS.gov questionnaire correctly. The link to the online application is available on our website. Remember, do not fill out your EIN application until your LLC has been approved. Do you happen to already have an EIN for your business? If you already have an EIN it’s most likely attached to a sole proprietorship. This is quite common. In this case, you’ll need to close out that EIN and get a different one for your newly formed LLC. You can find detailed instructions on our website, as well as a template letter that you can download and then send to the IRS.

A Federal Tax ID Number is issued by the IRS to business entities.

It is also known as an EIN, or Employer Identification Number.

For simplicity, we will refer to it as the EIN.

An EIN is to a business what a Social Security Number is to an individual.

It basically identifies your LLC to the IRS.

Even though it is called an Employer Identification Number, it does not mean that you have to have employees.

What Are EINs Used For?

EINs are used for:

– Opening business checking, savings, or investment accounts.

– Filing taxes.

– Handling employee payroll (if applicable).

– Obtaining business lines of credit or business loans.

– Obtaining credit cards in the name of the LLC.

– Applying for business licenses.

Wait For LLC Approval

You must wait until your LLC is approved by the state before obtaining your EIN.

You do not want to have any issues with an EIN assigned to the wrong LLC (dealing with the IRS to cancel an EIN is a pain in the neck).

What Does an EIN Look Like?

An EIN is similar to a Social Security Number in that it has 9 digits.

To differentiate an EIN from an SSN, there are 2 digits followed by a hyphen and then 7 more digits.

An EIN will look like this: 68 – 3302189

How Much Does an EIN Cost?

An EIN is free.

No, really, they’re completely free.

You can obtain an EIN from the IRS.

Unfortunately, many websites will charge you $50 – $100.

How to Obtain an EIN

EINs can be obtained in 3 ways: by mail, by fax, or via the IRS’s online application.

An EIN by fax takes 4 days. Too long.

An EIN by mail can take up to 4 weeks. Way too long.

An EIN by online application takes 15 minutes.

Your EIN will be issued immediately after you answer all of the questions in the online application.

You will then be able to save and print your new EIN, as well as your Confirmation Letter. Make sure to save copies of these and keep them with your LLC documents.

SSN for US Citizens or ITIN for non-Citizens (but not required)

You will need to have the member(s’) SSNs or ITINs ready before you begin the online application.

If you are a US citizen you will use your SSN (Social Security Number).

If you are a foreign national or non-US resident you can use your ITIN (Individual Taxpayer Identification Number).

If you are a foreign national or non-US resident and do not have an ITIN, you can still obtain an EIN from the IRS. You just can’t get it online. You need to file Form SS-4 by mail or fax and write “Foreign” on line 7b.

If you have questions for the IRS, their phone number is 1-800-829-4933. Additional IRS contact info here.

How do I Get the EIN Online Application?

Important: Unless your LLC has been approved, do not apply for an EIN.

Although many websites charge money for obtaining an EIN, it’s actually completely free ($0) from the IRS.

You can obtain an EIN:
– by mail (Form SS-4)
– fax (855-641-6935)
– or online

EIN Confirmation Letter

Once you finish the online application, you can download the EIN Confirmation Letter (Form CP-575) from the IRS’s website. If you apply my mail or fax, this form will be returned by regular mail.

Here is what it will look like:

EIN Confirmation Letter (CP 575) for LLC

Already Have an EIN for Your Business?

If you already have an EIN, it’s most likely attached to a Sole Proprietorship. (This is quite common.)

You’ll need to close out that EIN and get a different one for your LLC (after your LLC is approved).

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39 Comments

  1. Moen Chishti February 24, 2017

    Hi Matt,
    i am a huge fan of LLCUniversity. you are a giver and i really appreciate it. keep up the good work , which you are already doing great.

    i have a question regarding EIN. i am going to start e-business where i’ll import sales tax exempt goods from europe and will sell them online. while setting up my EIN, it asks for business category in “Details” section. it has many categories but “Retail” seems very close but neither short description nor the IRS help / google tells exactly what should be the category.
    Could you please give me some guidance or refer me some link which explains this kind of business category.

    thanking in advance.

    regards,
    moen chishti

    reply
    • Matt Horwitz February 28, 2017

      Hi Moen, apologies for the slow reply. And first, thank you for the kind words! I really appreciate it! There are no good write ups on this, so, based on what you’ve shared, it’s easiest just to select “other”, and then manually and briefly explain your business. Hope that helps! Let me know if you need anything else.

      reply
      • is June 22, 2017

        When changing the name of an LLC do I need a new EIN number? Thank you for all info.

        reply
        • Matt Horwitz June 23, 2017

          No, an LLC name change does not require a new EIN. You can find additional details from the IRS here.

          reply
  2. Fred July 24, 2017

    I registered my EIN before my LLC was approved and it is approved but I am a Single Member LLC and already have a business checking account and sales tax permit. I am pretty sure my EIN is connected to a Sole Proprietorship, but if i am going to be taxed as a disregarded entity either way considering I am the only member, do i need to get another EIN for my LLC?

    Thank you for all of the information you provide.

    reply
    • Matt Horwitz July 24, 2017

      Hi Fred, the first EIN you applied for, was that under your name, or under the LLC? If it’s under your name, then it’s attached to you as an Sole Proprietorship. If your bank is okay with moving the account into your LLC name, then you may be okay. But it is cleaner to get a new EIN so it’s “attached” to the LLC. Also note, your business checking account and sales tax permit are are also attached to you and not the LLC. If you’re going to form an LLC and do business through the LLC, then the bank account and sales tax permit should be in the LLC’s name.

      reply
      • Fred July 24, 2017

        Thank you for the extremely quick response. I have an EIN registered for my business and a separate bank account with that EIN in the LLCs name. The sales tax permit is also in the LLCs name. I think I have done everything correctly so far, my only concern was that I created the EIN before I created the LLC. When creating my original EIN I picked LLC on the first page when it asks you what legal structure you identify yourself as. I than picked starting a new business and that I am the only member. The only other thing is when I was creating the EIN, when it asks who is the responsible party, I picked myself the individual, not an existing business. Both my name and the LLCs name are on the EIN, my name has Sole MBR next to it. Thank you again for any information you can provide for me.

        Fred

        reply
        • Matt Horwitz July 24, 2017

          Okay, thanks for the details. I had it incorrectly understood the first time. You did everything correctly Fred. You just applied for the EIN before the LLC was actually approved. It’s usually best to form the LLC first then apply for the EIN, but since everything went through, you’re fine and all set :) You applied for the EIN correctly.

          reply
          • M Verdugo February 6, 2018

            Same here – thanks for answering Fred’s question as I had the same one. thank you!

            reply
            • Matt Horwitz February 9, 2018

              Nice! You’re welcome. It pretty much works like this… the IRS doesn’t check if the LLC is “approved” before they issue an EIN. Hope that helps.

              reply
  3. Iris October 27, 2017

    Hi Matt,
    Excellent work on all the areas you are posting in this website. Extremely helpful!
    I would vey much appreciate if you could advise me on the situation I describe below regarding the EIN.
    I am a homemaker and file taxes jointly with my husband. Recently I have been looking at the various options to work from home through online jobs. Along these lines I have looked into:
    – typing
    – translating documents from and into French
    I applied to an online agency who would consider me as an independent contractor when forwarding to me the assignments. This agency has requested me my social security number. Providing my social security number through a website is something I am not too comfortable with particularly due to the risk of identity theft.
    Here is where I have the following questions with which I hope you may help me.
    1) In the IRS website I saw that there is a number (EIN) which may be used instead of the social security number and thus protect the SSN. Would this be a possibility for the situation I described?
    2) If I get an EIN how would this affect the joint tax filing? Would I have to file everything under the EIN or only what I have earned by my online jobs?
    3) If I get an EIN but then it turns out that I don’t get any assignments thus I don’t earn any money, what happens them? What is it I then have to do when the time comes to file my taxes?
    4) Can a company refuse to use my EIN instead of my SSN and insist that if I don’t provide them with the SSN then they will not consider me for the typing and/or translating assignments as independent contractor?
    5) Is there something else I should consider and/or be cautious about?
    Thank you.
    Sincerely,
    Iris

    reply
    • Matt Horwitz October 27, 2017

      Hi Iris, thanks for the kind words. Glad the site has been helpful for you :) This is a little bit outside of our wheelhouse, but I’ll answer as best I can. 1. The EIN is used for business activity, whether that’s an LLC, or a Sole Proprietorship. The purpose of the EIN is not to mask the SSN, but sometimes an EIN can offer privacy, say when filling out a W9 or similar tax form. I think you can use the EIN for your Sole Proprietorship/Independent Contracting and it will have that affect for you. 2. It should not affect your joint tax filing, but please double-check with your accountant. 3. I can’t tell you how to file your taxes, but if you get an EIN and then don’t have any tax obligations, no need to worry. Simply obtaining an EIN doesn’t mean you owe a return. 4. Yes, but it’s not that common. 5. Yes, you could form an LLC and then do the contract work through the LLC. You’ll get an EIN for the LLC (instead of for yourself) and you’ll also get liability protection in case you were ever involved in a lawsuit. Just something to consider. Hope that helps :)

      reply
      • Iris October 29, 2017

        It has been very helpful. Thank you!

        reply
        • Matt Horwitz October 29, 2017

          You’re welcome Iris!

          reply
  4. Ellis November 25, 2017

    Hi Matt,

    Hope you can help with a question. I am a foreigner and my attorney registered me my single member LLC via an SS-4 form. I received the CP575A notice from the IRS and it only lists my name on the notice, my company name is not on there. When my attorney registered for the EIN, she listed my name on Line 1 for Name of Legal Entity on the SS-4, and the company name on Line 2 under Trade Name. She checked “yes” to LLC on Line 8. For 9a, she put “Sole Proprietor”. Our LLC is registered with the state under the company name, not under my name. I believe the EIN may have been registered incorrectly. Shouldn’t my company name be listed somewhere on the CP575A?

    I spoke with the IRS today and they said to submit a letter requesting to update the information. Have you ever heard of this situation before? They can’t tell if I’m registered as a sole proprietor or a disregarded entity. I’m a little confused.

    Thanks in advance for your help!

    reply
    • Matt Horwitz November 29, 2017

      Hi Ellis, this is technically not correct, as the existing EIN is registered to you as an individual (Sole Proprietorship) and having the LLC as a trade name is also not correct. Although you can write a letter to the IRS requesting the change, it might be easier to cancel the EIN and then re-submit form SS-4 properly (and getting a new EIN). Hope that helps.

      reply
      • Carol April 7, 2018

        Hi Matt,
        Thank you for all of your useful information and your time. It is greatly appreciated! I was hoping that Ellis’ reply would answer my question but I am still not clear and worried about filing wrong.

        I have my Articles of Organization for my LLC. On the EIN form, should the business name go on line 1 and then my name and SSN goes on line 7a&b?

        reply
        • Matt Horwitz April 8, 2018

          Hi Carol, you’re very welcome! Thank you for your nice comment :) Yes, you are correct. However, if you have an SSN, you can just apply for your LLC’s EIN using the online application (instead of mailing of faxing SS-4). Hope that helps.

          reply
  5. Heidi January 5, 2018

    Hi Matt

    I’ve recently started an online business and i got my EIN before deciding to apply for my LLC. I found your youtube video stating that it should not be done that way and now I’m worried. I did have to put in my EIN number when applying for my LLC. Should I be okay? How do i find out if my EIN is properly associated with my LLC? Your help would be greatly appreciated!

    Heidi

    reply
  6. Heidi January 5, 2018

    Sorry I miss spoke (typed). I did not put my EIN number in for my LLC. I put it in for my sales tax license.

    Thanks.

    reply
    • Matt Horwitz January 15, 2018

      Hi Heidi, apologies for the slow reply. Did the state approve your LLC filing? Does your EIN Confirmation Letter have the same name as your LLC? If so, then you’re all good. Yes, you’re supposed to do the LLC first (wait for approval), then obtain the EIN… but if you got the EIN first and the LLC was approved second, it still has the exact same effect. The IRS doesn’t check to make sure the LLC exists first.

      reply
      • Heidi Carter January 20, 2018

        Thank you for the reply! Yes the state approved my LLC filing. But I see now that the letter I got from the IRS with my LLC name has an EIN number on it which is dated 12-26, but I also recieved a notification thru LARA Department of licensing and affairs on January 4th that i have my llc but the id number they have on it is different than the ein i was issued. ‘Im confused. Did they issue me a new ein or is the id number something different?

        reply
        • Matt Horwitz January 22, 2018

          Hi Heidi, the ID Number from LARA is not the same thing as your EIN. Your EIN comes from the IRS. Your Michigan LARA ID Number is issued by LARA and is another way they keep track of businesses in the state. Hope that helps.

          reply
  7. Michael Russ March 12, 2018

    Is it okay to create an LLC but not file for an EIN?
    Thanks!
    Mike

    reply
    • Matt Horwitz March 26, 2018

      Hey Mike,

      Curious, why would you not want to get an EIN for your LLC?

      Your LLC is required to get an EIN if:
      – You have a Multi-Member LLC
      – Your LLC is taxed like an S-Corporation
      – Your LLC is taxed like a C-Corporation
      – Your LLC will have employees (for withholding, payroll, and employment taxes)
      – Your LLC will withhold income (non wages) for a non-resident alien (an individual who is not a US citizen or a US resident alien)
      – Your LLC has a retirement account/pension/SEP/Keogh
      – Your LLC need to file federal excise taxes
      – Your LLC needs to file alcohol, tobacco, or firearms taxes

      If you have a Single-Member LLC and none of the above apply, your LLC isn’t required (by the IRS) to get an EIN:
      For federal tax purposes, if you have a Single-Member LLC that will be taxed in its default status (taxed as a Sole Proprietorship) AND your LLC falls outside of the requirements mentioned above, your LLC doesn’t need an EIN and you can just use your SSN on your federal tax returns. However, there are reasons outside of reporting federal taxes with the IRS where a Single-Member LLC may still need to get an EIN:

      • Some states and local governments (county, city, township, etc.) may require an EIN for certain tax returns and payments.
      • Some business licenses and permits may require your LLC to have an EIN.
      • When opening up an LLC bank account for a Single-Member LLC, even though the IRS doesn’t require an EIN (again, only if your LLC falls outside of the requirements mentioned above), most banks will still require an EIN for your LLC to open an account. We did some research on this however and found that approximately 10-20% of banks we spoke with will still be able to open an LLC checking account for a Single-Member LLC using the owners’s SSN (and not requiring an EIN).

      As a final note, even if your Single-Member LLC doesn’t need an EIN with the IRS right now, if you change your tax status with the IRS at any point (by electing S-Corp or C-Corp taxation or by adding a member to your LLC [and therefore becoming an LLC taxed as a Partnership]), you will need to apply for an EIN.

      Hope that helps!

      reply
  8. Enjoli Blackshear March 18, 2018

    Hello I have a partnership business with my mom and aunt. We filed for an ein first then 4yrs later I filed for a llc. Do we need a new ein and I’m the registered agent do I need to add them on as well?

    reply
    • Matt Horwitz March 27, 2018

      Hi Enjoi, yes, all Multi-Member LLCs need to obtain an EIN from the IRS. The EIN you have from before is not attached to this new LLC. And it doesn’t matter who the Registered Agent is. It matters who the Members (owners) are. Hope that helps.

      reply
      • Enjoli Blackshear March 27, 2018

        Ok so we need to obtain a new ein? What about our bank acct with the
        old ein would that be affected?

        reply
        • Matt Horwitz March 28, 2018

          That bank account is likely for your Partnership, not your LLC. Now, your LLC is taxed as, but it is not a Partnership. There’s a big difference. You’ll want to open a new bank account for your new entity or ask the bank if the account owner information can switched from your Partnership to your LLC.

          reply
          • Enjoli Blackshear March 30, 2018

            So basically we need to apply for a new ein for the LLC. And see if the bank will switch our account to a LLC acct since the owners are still the same. Or should I close the LLC and reopen it with a new EIN

            reply
            • Matt Horwitz April 8, 2018

              Yes, correct, you’ll need a new EIN for your LLC. Hope that helps.

              reply
  9. Ian March 20, 2018

    Hi Matt,
    I am thinking of setting up a consulting LLC where I am the principal and only member. Since income is reported on my personal tax return as a pass through, do I need an EIN or can I simply use my SSN?

    reply
    • Matt Horwitz March 26, 2018

      Hey Ian, I just replied to this a few minutes ago ;) Please see my reply to Michael. I believe it’s just a few up from your comment.

      reply
  10. Tracy March 27, 2018

    Hi Matt,
    I just finished filing my EIN and received a hint to file a 1128 form to adapt, change or retain a tax year. Do you know why I would receive something like this? And thank you so much for this wonderfully informative university.

    reply
    • Matt Horwitz March 27, 2018

      Hi Tracy, you’re very welcome. Glad you are getting value from the site :) What do you mean by “hint”? And who sent you this letter? Did it come from the actual IRS? It doesn’t like it did.

      reply
      • Tracy March 27, 2018

        Hi Matt,
        Yes, it came from the IRS as I completed the form. It appeared after I placed the month and year when I will start my business.

        reply
        • Matt Horwitz March 27, 2018

          Hi Tracy, it may have just been a note about changing an LLC’s tax year (if needed). You shouldn’t need to file Form 1128 though. The tax year should just be the calendar year by default. Just in case you did something incorrect during the EIN application though, I recommend calling the IRS business line at 800-829-4933 and giving them your EIN. Then ask to make sure your LLC is running on the calendar year (January 1st to December 31st). It should be that way, but it’s best to call and double check. They open at 7am during the week. The earlier you call, the shorter the wait time. Hope that helps!

          Hope that helps.

          reply
          • Tracy March 28, 2018

            Will do and thanks again.

            reply
            • Matt Horwitz March 28, 2018

              You’re welcome Tracy :)

              reply

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