Keep in mind you will also need a new business bank account if you originally opened one as a sole proprietor.

Federal Tax ID Number

It connects tax records to individuals or corporations. The number is sometimes referred to by an old term: TIN, for taxpayer identification number. A Limited Liability Company with a single owner can do the same — all taxes are paid on an individual return. Other business structures need an EIN to separate their corporate taxes from personal taxes. A partnership requires an EIN when filling out distribution forms for the IRS, even though no tax is paid by the partnership itself.

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A new EIN number is required when a business is first started, or when certain circumstances change. When you decide to form a limited liability company , there are several things you need to do to ensure you are in compliance with state and federal tax laws. Carefully understanding all of the regulations will help you meet your tax obligations as you move forward with your new LLC company. If you are an existing sole proprietor limited liability company and you are about to hire your first employee, you will need to obtain a federal tax number for that purpose.

If you are a sole proprietor LLC without any employees, you can continue to use your Social Security number for your tax filings if you wish. Be aware though that an EIN can help you avoid identity theft issues that can pop up when you are filling in your Social Security number on forms and giving it out to clients and vendors. While you can apply for an EIN yourself, you can also authorize someone else to do it for you. You can apply for one through this online tool if your principal place of business is in the U.

Employer Identification Number

To obtain an EIN, you must complete the online form in one session. If you leave the form idle for more than fifteen minutes, the session will expire and you will have to start over from scratch. After you complete the EIN application, you will receive the federal tax ID number immediately online. When obtaining a tax ID number through the online application, you need to specify the type of legal structure of your company and a limited liability company is the option to check here.

You need to indicate the number of members in your LLC as well as the state where it is physically located. You are also required to give a reason for why you are getting a tax ID number now such as forming a new business or because you are going to hire employees.

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Minnesota Tax ID Requirements | Minnesota Department of Revenue

You need to enter your name and Social Security number into the form. Once you complete the application, you will receive the EIN and can begin using it immediately. Just answer a few simple questions online and we file the paperwork and deal with the IRS on your behalf.

We will also help you start an LLC, corporation, or nonprofit and our legal help plans get you in touch with an independent attorney. An offer of membership in our legal plan is not an endorsement or advertisement for any individual attorney. The legal plan is available in most states. Disclaimer: Communications between you and LegalZoom are protected by our Privacy Policy but not by the attorney-client privilege or as work product. LegalZoom provides access to independent attorneys and self-help services at your specific direction. We are not a law firm or a substitute for an attorney or law firm.


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We cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies. We are a document filing service and are not affiliated with any government agencies. Depending on a specific set of circumstances, small business owners can file their taxes using either a Social Security number or an Employer Identification Number EIN.

How to Apply

Not all small business owners are required to apply for an employer ID numbers. The following are conditions that might make it necessary for you to have an EIN:. If you did not answer any of these questions affirmatively, then you can probably operate your business as a sole proprietorship and use your own Social Security number to file your taxes. However, there are a number of reasons why you might want to apply for an EIN.

Tax ID, Employer ID, or Individual Tax ID Number Explained

An EIN is easy to get and it costs nothing. Used on business documents and payments, the number identifies you as a business owner and not an employee. This may be advantageous with clients or customers. Also, having an alternate number to use as a tax ID allows you to keep your personal social security number private.

10 Steps to Starting a Business: Step 6 Apply for an EIN - All Up In Yo' Business