Today's question: Do I need an EIN number for my new LLC?
My other video discusses an EIN...but an EIN is an Employee Identification Number and it
is a Tax ID number that the IRS uses for your business.
If you form an LLC and you are a single member LLC, you might not need an EIN.
It's likely that you can file your taxes under your social security number just as if you
were a sole proprietorship and filed your taxes on Schedule C. However, you still might
want to consider getting an EIN because in my experience oftentimes when you go down
to the bank to open a business checking account they're going to ask you for that Tax ID number.
Now if your banker really understands things they should let you open your checking account
under your social security number but a lot of times an EIN number makes that process
much easier because you get this letter from the IRS.
In addition, it's not a bad idea to have an EIN because when you file your business tax
return and taxes you can put that EIN number on there even if it is flowing through to
your Schedule C. Furthermore, if you plan to hire employees you are going to need an
EIN eventually so getting one in the beginning isn't a bad idea.
If you are a multi-member LLC you are going to need an EIN from the get go because you
have more than one member so it is a good idea to get that set up right away after you
form the LLC and before you go down to the bank to set up your accounts.
So there are multiple factors about whether you need an EIN.
It's not a big deal to get one and it's often a good idea to have one depending on your
specific situation.
Great question, and thanks for asking!
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