Does a Single-Member LLC Need an EIN?

Woman looking at a computer and reading an article about EINs.

An Employer Identification Number (EIN), or Federal Tax ID Number, is like a social security number for your business. The EIN allows the IRS to keep track of a business’ tax reporting.

Learn more about what an EIN is and why you need one here.


Benefits of an EIN for Your Single-Member LLC

Not all businesses are required to get an EIN. However, no matter what kind of business you have, it’s usually a good idea to obtain one. You can apply for one through the EIN Assistant on the IRS website. You won’t be wasting your time; it’s a free and simple process with several advantages:

  • If you form your business without an EIN or employees, but then find yourself ready to start hiring, you will already have an EIN.
  • Getting an EIN instead of using your Social Security number (SSN) will keep your SSN more private and reduce the risk of identity theft.
  • Most banks require an EIN in order to open a business banking account. A business bank account is another way to keep your personal finances and professional finances separate.
  • Just as a Social Security number tracks your personal credit, the lending and credit agencies use the EIN to track your business’s credit.
  • Although an EIN is not required to apply for all business loans, a lot of lenders prefer a company that has established its business credit through a business bank account and lines of credit associated with the companies EIN.

Read more about the benefits of getting an EIN here.

What is a Single-Member LLC?

A single member LLC is a business with only one owner that is not taxed separately from their business. Like a sole proprietorship, a single member LLC is taxed as a disregarded entity by default.

Because the government ignores disregarded entities, they undergo "pass-through taxation." This means all profits or losses from the business pass through the business directly to you, the business owner. You in turn are responsible for paying income taxes on your earnings via your personal tax return.

When Does a Single-Member LLC Need an EIN?

If your business is a single-member LLC with employees or excise tax liability, then you are required to get an EIN. If your business is a single-member LLC with no employees or excise tax liability, then you are not required to obtain an EIN. However, it’s still recommended to get one to help maintain your corporate veil.  

The corporate veil protects business owners from personal liability for the business’s debts. Keeping personal finances and professional finances separate will help prevent you from piercing the corporate veil. It will also establish credibility and professionalism by allowing your business to have its own identity separate from its owners.

Getting an EIN as a single-member LLC can also decrease your risk of identity theft; using an EIN instead of your Social Security number (SSN) will keep your SSN more private. It’s less likely for someone to break into your accounts when you keep business finances and personal finances separate. If you’re a single member without an EIN, and you continue giving out your SSN to clients or vendors, you’re putting yourself at higher risk.

How to Get a Free EIN for Your Single-Member LLC

The quickest and simplest way to get a free EIN is to apply for one through the EIN Assistant on the IRS website.

You can also apply for an EIN by fax or mail by completing Form SS-4. If you are submitting by fax, send the EIN application to fax number (855) 641-6935. If applying by mail, submit to Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999.

Here is some helpful information to guide you in requesting your EIN through the IRS website:

  • The IRS’s hours of operation for obtaining your EIN are Monday-Friday from 7 a.m. to 10 p.m
  • Only United States and U.S. Territories-based businesses are eligible
  • You must have a valid Taxpayer Identification Number (SSN, ITIN,EIN)
  • The entity owner or responsible party may only apply once per day
  • Your application must be filled out in one session and cannot be saved
  • The session will time-out after 15 minutes if not in use
  • You will immediately get an EIN after the form is completed
  • Applications cannot be processed if an EIN was previously obtained online

FREQUENTLY ASKED QUESTIONS

1. Do I need an EIN if I’m self-employed?

You don’t need an EIN if you’re self-employed; you can simply use your Social Security number. However, some people who are self-employed choose to apply for an EIN instead of using their Social Security number to reduce the risk of identity theft. It’s less likely for someone to break into your accounts when you keep business finances and personal finances separate.

2. Is there a difference between an EIN and a TIN?

No, there is not a difference between an Employer Identification Number (EIN) and a Taxpayer Identification Number (TIN). Both refer to the nine-digit number issued by the IRS for your business.

3. Is there a difference between an EIN and a FEIN?

No, there is not a difference between an EIN and a Federal Employer Identification Number (FEIN). A FEIN can also be referred to as a Federal Tax Identification Number.

4. How do I look up my EIN?

It is very easy to look up your EIN, and there are several ways you can do so. First, the IRS will typically quickly email or send a physical letter confirming your EIN application. You can also check business documents such as tax returns to find your EIN printed there.

5. How do I look up another business’s EIN?

You can look up another business’s EIN by searching for the company on the Securities and Exchange Commission (SEC) EDGAR online Forms and Filings database.

6. How do I recover my EIN if I forget or lose it?

If you still aren’t able to find your EIN by checking for a confirmation email or letter, or by identifying it on your business documents, you can simply call the IRS EIN Department at 1-800-829-4933 to speak with one of their representatives. Their hours of operation are Monday-Friday from 7 a.m. to 7 p.m.

7. What is the difference between an EIN and a DUNS number?

An EIN is a nine-digit number issued by the IRS to keep track of a business’s tax reporting. The Data Universal Numbering System (DUNS) is a nine-digit number issued by Dun & Bradstreet, a business analytics company. A DUNS number helps businesses create and identify their credit reports.

 

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