This is an up-to-date guide on the EIN application process.
We’ll tell you how you can apply for an EIN and answer the top 10 most frequently asked questions about the EIN application.
What Is EIN?
Employer Identification Number (EIN) is a unique number assigned to your business. It acts like a Social Security Number (SSN) but isn’t meant for individuals. This nine-digit number is used by the Internal Revenue Service (IRS) to identify your business for tax reporting purposes.
An EIN can also be referred to as Federal Employer Income Number (FEIN) or Federal Tax Identification Number (FTIN). So don’t get confused when you see one of the two other terms.
The IRS issues your EIN. You can apply online, via telephone, fax, or mail.
How to Apply for an EIN; Ways to Apply for an EIN
Applying for an EIN is fairly easy. You can complete the entire application online, by mail or by fax.
Step 1: Review the EIN Application Form SS-4
Before starting your application you must make sure you have all the necessary information with you. The best way to check this is by going through the application form.
The information you’ll have to provide to apply for an EIN includes:
- Your business structure (LLC)
- Details of LLC member(s)
- Reason for requesting an EIN (e.g.: started a new business)
- Details of the person to contact on behalf of the LLC (‘responsible party’)
- Business Address (U.S. address, not a P.O. Box)
READ: How to Get a Physical Business Address if You Don’t Live In the US
Step 2: Apply for an EIN Online or via Mail/ Fax
The online application is the fastest way to apply. Unfortunately, you can’t do it unless you have an SSN. Non-resident aliens have to apply through mail or fax.
Alternatively, you can choose our Business Formation package which includes an EIN application and a business address. Simply fill out your details and we’ll take care of the rest for you.
Step 3: Wait
You’ll have to wait for two to more weeks to receive your EIN. Usually, mail applications take longer, especially if your application is coming by mail from overseas.
FAQs
Here are some of the most frequently asked questions about applying for an EIN for an LLC.
Can an LLC Apply for an EIN?
Yes, an LLC can apply for an EIN. And no, an LLC isn’t required to apply for an EIN if it’s a single-member LLC.
However, there are many benefits to having an EIN, even for single-member LLCs.
Why Should I Get an EIN?
Here are the main reasons why you should consider applying for an EIN, even if you’re not required to.
Corporate Veil; LLC Liability Protection
An EIN separates your LLC from your personal affairs, granting you liability protection. Look at it this way, when your LLC has its’ own identification number, an EIN, it’s seen as a separate entity.
This means that your personal affairs are separated from your business affairs.
Open a Business Bank Account With an EIN
An EIN is necessary to open a business bank account in the USA. Opening a bank account will help you separate your finances from your business’ finances.
Having a business bank account in the US means you’ll have access to different business benefits and you’ll also be able to build your company’s credit.
Build Business Credit With an EIN
As mentioned above, an EIN will allow you to open a bank account. With a US bank account, you can access business credit and loans. You can slowly build your credit and get access to even more benefits.
An EIN will build the credit separate from you, the owner. Meaning that if your credit gets worse, it will not affect your business. And vice versa, if your business credit gets worse, it won’t affect your credit.
Keep Your Data Secure
If you have an EIN for your business, that means your personal tax identification number (SSN or ITIN) are kept more private. This diminishes the risk of identity theft and fraud-related crimes.
Is an EIN Free for an LLC?
You might be wondering whether it costs money to get an EIN, the answer is no.
You can apply and receive your EIN for free.
If you don’t feel comfortable going through the process by yourself, you can pay someone to do this for you.
We offer the EIN application service as part of our company formation package.
Learn more here.
Do You Need an EIN for Each LLC?
Yes, you should apply for an EIN for each of your LLCs / businesses.
An EIN is a number you’ll use when reporting taxes to the IRS. Since each business will generate its profits, it’ll need to report its’\ taxes separately.
The idea is to keep your businesses separate from each other and from you, that way your assets are protected and you’re less likely to make mistakes in your tax returns.
Should I Get My EIN or My LLC First?
You need to form your LLC before applying for an EIN for the LLC.
During the EIN application process, the date of formation and details of the LLC are required.
Can I Open an LLC Without SSN?
Yes, you can open an LLC without an SSN.
If you’re a non-resident alien then you don’t have a personal tax identification number from the US (SSN).
You can still open an LLC and apply for an EIN without an SSN.
Company Formation for Non-resident Aliens; Read Our Guide Here
The only thing is that you can’t apply for an EIN online if you don’t have an SSN. But there are other ways to apply, like via mail or fax. They just take longer.
Do I Need an EIN for an LLC Bank Account?
Yes, you’ll have to have your EIN before you can open a business bank account for your LLC.
The process should look like this; first, you form your LLC, then you apply for an EIN, then you open a business bank account.
What’s the Difference Between LLC and a Single-Member LLC?
An LLC can either be a single-member LLC or a multi-member LLC.
A single-member LLC is an LLC that only has one owner, the only member. A multi-member LLC has more than one owner.
The number of owners will affect the ownership, distribution of profits, management, tax rates, and compliance requirements.
Both single-member and multi-member LLCs provide liability protection, meaning that the members are protected from losing their personal assets beyond their investment in the company.
Who Needs an EIN?
You need to get an EIN for your LLC if the LLC has more than one member, if it’s going to have employees, or if it is going to declare bankruptcy.
However, as mentioned above, there are many benefits to having an EIN for your LLC even if it isn’t required.
What Do I Do After I Get My EIN Number?
When you receive your EIN keep it safe as you’ll have to use it whenever you communicate with the IRS, or whenever you want to do any of the following:
Opening a Business Bank Account With an EIN
As we mentioned earlier, an EIN gives you access to the US business banking system. You’ll need it to open a business bank account in the states.
Getting Business Permits With an EIN
If your business needs to obtain any permits within the USA, you’ll most likely need your EIN during the application process.
File Your LLCs Tax Return With An EIN
Since your EIN is your business’ tax identification number, you’ll use it to file your tax returns. The usual deadline for LLCs is March or April for single-member LLCs. Always double-check this with the IRS to make sure you’re on time. You could face a big fine otherwise.
Summary
The easiest way to apply for an EIN is online with the IRS. This option is not available to foreigners forming an LLC in the USA.
Non-resident aliens have to apply via mail or fax, which can take longer.
We recommend that you take your time when applying and prepare by looking at the EIN application form.
If you want to save time and avoid mistakes, hire our professional business formation service.
All you have to do is fill out an online form and we’ll take care of your company formation, EIN registration, and provide you with a business address.
We welcome foreign customers who want to form their business in the USA.
