EIN For My One-Member LLC

Written by Peter Tran

July 12, 2017

Do I need to get an EIN (Employer ID Number) when I’m only member of LLC?

One of most important reasons that a business owner decides to establish LLC (Limited Liability Company) with only one member in business is that y want to protect ir personal assets from any loss that business may cause.

Limited Liability Company is relatively to set up, but tax payment is not as clear because re is no separate tax classification for LLC. business owner of LLC should decide which tax classification y are going to file on: sole proprietorship, partnership, or corporation.

A single-member Limited Liability Company is classified as a “Disregarded Entity” by default, and treated as a sole proprietorship for income tax report.

One may file ir business income on ir personal tax return, Form 1040 using ir Social Number (SSN) when y are only member of ir business. So why do we want to obtain EIN in this case?

Let’s say that I, a business owner whose LLC has only one member, myself, want to open a bank account for business. y ask me if I want to use my SSN for my LLC business account. Well, reason that I set up LLC was that I didn’t want to mix my personal assets with my business. So do I want to use my social number to open a business account? Shouldn’t I make my business as a separate as possible to gain better protection against personal liability?

According to some reports, in certain circumstances, some courts may decide that an LLC didn’t practically exist and its owner ran business as an individual rar than as an LLC when he or she has paid tax on ir personal tax return.

Here is summary of benefits of using EIN over SSN for an single-member LLC.

For above reasons, it’s advised that a business owner may acquire EIN from even for one-member LLC.

Acquiring EIN is very simple and takes less than 10 minutes.
Get an EIN for your single member LLC.

This post is not intended to constitute rendering of legal, accounting, or or professional services or to serve as a substitute for such services.

By Russell, May 2, 2009 @ 11:38 am

I just received answers to some old business questions from your website. I under significant points of having an EIN now.

By Mass Kash Media, July 15, 2009 @ 7:00 pm

So if I’m receiving money from sources online that are going to 1099 me at end of year, is it better to ve m my SSN or my LLC’s EIN. I’m a SMLLC so it’s only me that has to worry about paying any ts as an employee.

By Misty Tolman, July 23, 2009 @ 10:47 pm

I was wondering…If I have a EIN under a sole proprietor and want to start anor business and make my second business a LLC business do I need to apply for a second EIN?

By admin, October 12, 2009 @ 5:11 pm

You may need only one EIN, but I’d consult a CPA or tax advisor.

Hope this publication helps:
http://www.irs.gov/pub/irs-pdf/p1635.pdf

>>You do not need a new EIN if any of following are true:
>>• You change name of your business
>>• You change your location or add locations (stores, plants, enterprises or branches
of )
>>• You operate multiple businesses (including stores, plants, enterprises or branches
of )

Source

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