Should i get LLC before ein application [Must-Know Tips]

Last updated : Aug 18, 2022

Should I get my EIN or LLC first?

We recommend you form your LLC before you get your EIN. One of the main reasons is that when you apply for your EIN, the IRS application asks you to submit the approved legal name of your business and the date it was formed. So, it is helpful to have your LLC formed and registered before you try to get your EIN.

Can I apply for EIN while LLC is pending?

You need to form your LLC before getting an EIN. This is because the IRS will ask for your business formation date and legal business name on the EIN application. You will need to register your business and get approval for the business's name from your state before applying for an EIN.

When should I apply for an EIN number?

You should apply for an EIN early enough to have your number when you need to file a return or make a deposit. You can get an EIN immediately by applying online.

Should I create EIN for LLC?

An LLC will need an EIN if it has any employees or if it will be required to file any of the excise tax forms listed below. Most new single-member LLCs classified as disregarded entities will need to obtain an EIN. An LLC applies for an EIN by filing Form SS-4, Application for Employer Identification Number.

How do I add my LLC to my EIN?

The IRS asks that you send a letter, on company letterhead (if available) providing the name and Social Security Number of the owner(s) of the LLC. Be sure to include the LLC's complete name, EIN, and mailing address so the IRS can correctly identify your IRS account.

Is a EIN and LLC the same thing?

The EIN is just a type of Taxpayer Identification Number (TIN) that identifies your LLC with the IRS. An easy way to think of an EIN is that it's like a “social security number” for your LLC. An EIN is similar to a social security number in that it has 9 digits.

Can I use my EIN right away?

This EIN is your permanent number and can be used immediately for most of your business needs, including: Opening a bank account. Applying for business licenses. Filing a tax return by mail.

How much does an LLC cost?

You can file the LLC filing documents online, by mail, or in-person when visiting the local SOS office. The filing costs usually vary from $50 to $150 which is a single-time fee. If you plan to form your company in another state, then you might have to provide additional documentation and pay a higher formation fee.

Do I need an EIN to open a business bank account?

The first thing you'll need is an employer identification number — also called an EIN, FEIN or tax identification number. The IRS issues and manages your EIN. If you haven't filed for a tax ID number, you may still be able to open a business bank account with your personal Social Security number.

Is there a downside to getting an EIN?

There are no negative repercussions if you get an EIN and ultimately never use it. Even if it seems like you'll never use it, having one gives you the option down the road to take advantage of its benefits of having one. Plus, it's free and easy to apply for one.

What if I get an EIN and never use it?

The IRS cannot cancel your EIN. Once an EIN has been assigned to a business entity, it becomes the permanent Federal taxpayer identification number for that entity. Regardless of whether the EIN is ever used to file Federal tax returns, the EIN is never reused or reassigned to another business entity.

Do I have to file taxes if I have an EIN?

You need it to pay federal taxes, hire employees, open a bank account, and apply for business licenses and permits. It's free to apply for an EIN, and you should do it right after you register your business. Your business needs a federal tax ID number if it does any of the following: Pays employees.

How does an LLC avoid paying taxes?

A general Corporation making a Subchapter “S” Election or an LLC with or without a Subchapter S Election pays no federal tax on its taxable income and no employment taxes on its distributions to stockholders.

Can I file my LLC and personal taxes separate?

The IRS disregards the LLC entity as being separate and distinct from the owner. Essentially, this means that the LLC typically files the business tax information with your personal tax returns on Schedule C. The profit or loss from your businesses is included with the other income your report on Form 1040.

Can I buy a house with my EIN number?

Yes. You can use your EIN to obtain a loan, as long as it is for business funding. You cannot use this number to take out a personal loan, as an EIN is only designed for business-oriented transactions.

Can I change my EIN from sole proprietor to LLC?

Can I change my EIN from a sole proprietorship to an LLC? Yes, you can change the EIN from a sole proprietorship to an LLC. The Employer Identification Number (EIN) is a number issued by the IRS for tax purposes only. It is vital to note that each party is limited to one EIN.

How do I add my LLC to my business name with the IRS?

In order to legally effect a name change, LLCs and corporations are required to file a Certificate of Amendment with the state where they were originally formed. You can submit a copy of this document along with a name-change letter to the IRS to update your new name in the IRS records.

Should I get an EIN if I am a sole proprietor?

A sole proprietor without employees and who doesn't file any excise or pension plan tax returns doesn't need an EIN (but can get one). In this instance, the sole proprietor uses his or her social security number (instead of an EIN) as the taxpayer identification number.

Do I need a separate bank account for each LLC?

As the owner of an LLC or a corporation, you will have to pay bills that you normally would not have to deal with as a sole proprietor. As a result, the law requires you to open multiple business bank accounts for each separate business.

Whats the next step after getting your EIN number?

After you have an EIN, you can open a bank account for your business. This allows you to accept checks and payments in your business's name. In addition, you're legally required to keep your personal and business finances separated once you incorporate or form an LLC.

Check these related keywords for more interesting articles :
Company name ending with llc operating
LLC for business texas
LLC name change with irs
Becoming an llc in missouri
LLC search in tennessee
Where to register your LLC
Delaware llc name restrictions
How to get an llc in illinois
Best llc forming servicescape
Rental property LLC management company
How is an LLC taxed in illinois is social security
LLC tax as an s corporation quizlet
How do i get an LLC in pa
How to buy property with LLC
Starting an LLC partnership

Write a comment

all right so for this video i wanted to address a common question i get which is can i apply for my ein for my business before the entity is actually created right and so when would this arise well there are some states in the u.s where the process is quite slow to get an llc or corporation form so you file the documents with the state and a lot of times you have to wait up to two weeks to get the confirmation from the state that the entity is formed and legally existing and ready to go and so then you're asking yourself well during that two-week period can i go ahead and apply for my ein and get the ein while i'm waiting for the llc or the corporation to get formed the short answer is you know can you apply for it early you can the irs will allow this but in my opinion and a lot of other practitioners agree with this it is not recommended at all and here's why it's not recommended because there's always a chance that when you file the documents the state might reject your desired name okay and there's a couple reasons why this could happen one is it might contain some invalid characters all right so you've got a legal entity name that just doesn't comply with the state regulations or the names already in use um you know maybe the entity was uh maybe maybe timed it just right where somebody else took the same name and then just got it approved and so you know it didn't come up in this state um name search database when you were initially looking very possible that that can happen or you know the the entity name just contains words that's that are prohibited right so there are some um you know let's call them offensive words that you are not allowed to have in legal entity names depending on where you go on a state-by-state basis and so if something like that occurs then you have a problem now what if you do decide to ignore that advice and go ahead and apply for the ein anyway if you apply for the ein and ultimately it's going to have a different name than the llc or entity that's actually formed you now have a mismatch between you know what name is in the irs database and what the legal entity name is under um state law and so that's um that's a problem right so if you decide to keep the ein how do you update this with the irs well you there's a couple of options right so the first thing you can do is if you keep the ein when you file your first tax return for the llc or corporation so if it's a 1120s s corp return on 1120 c corp return or a 1065 partnership return on page one there is an option to check a box for name change and so what that will do is you check that box you use the actual name of the entity under state law right so what was legally formed on the tax return and then once the return is filed the irs system will update the name for that entity in the ein database okay now if you have already filed a return you forgot to do the name change you can still write a letter to the irs so the same address where you would file the return for your company depending on where what state you live and operate the company from you can write them a letter and explain uh that you just have a name change and the irs will update the database using that method the last alternative is just to apply for a new ein right not a great uh position to be in but it is an option so if you apply for a new iein once that actual llc is formed and you use the actual legal name um you can get that second ein and then for the first ein that now is assigned to an entity that doesn't really exist you write a letter to the irs to have them cancel that first ein um so a couple of options here you know kind of how to fix or remedy this but i'm going to go back to my initial advice here even if it takes two weeks to form an entity under state law do not apply for the ein until you have confirmed that the entity is created you've got the actual name and then you're there then you're good to go so yeah that's my advice so do not apply for an ein until you have an entity and then you can avoid all of this kind of mess down here to try to fix it if something goes wrong so that covers it thank you for watching and i look forward to seeing you again soon thank you

Thanks for your comment Eric Acor, have a nice day.
- Eneida Bitsko, Staff Member

so the topic would about today is is it right or wrong what should you do should you file your LLC first or should you get your EIN number okay so for individuals who do not know your EIN number it's also known as your employer's identification number and that is through on a federal level you do that with the IRS your LLC which is also known as your limited liability company it is done on a state level so you're gonna do that with your secretary of state whatever state you in the Secretary of State for Georgiou the Secretary of State for Illinois so one of the reasons one of the main reasons you want to I guess we need the answer should you file your LLC form your LLC or your ein for first drum roll please and the answer is you need to file your LLC first because you want to be recognized on the state level and the reason that I say this is that because when you go through the state level there takes some dotted some days to get approved for your LLC so you go in and you fill out your information to get your LLC makes days for the approval and then on top of the days for the approval they they ask you several different names you just can't put one name because one name it though one name may be taken so when the names going to be taking a cookie reject it so you don't want to go and file and get an EIN number and then your LLC isn't even approved that way it doesn't match the ultimate goal is for your LLC and your EIN to match your EIN is pretty much instant it's gonna die recisions gonna give it to you the state however goes through an approval process to form your LLC so you don't want it to be rejected and then the questions that the IRS once you get your LLC you go and you file your EIN number the ein the IRS application to get your EIN number you're gonna they're gonna ask you what date was your state was your LLC formated so you're gonna have to know that answer and you going into it and not knowing the answer that's not answering a question right it's not able to submit it in honestly well you're going to get your EIN number the first thing that they access is this information truthful to your knowledge and your answering yes this is the formation you don't even have the information from your arrows LLC so make sure that when you're fouling or you're forming your business you're gonna get your LLC first and then once everything is approved and going through with your LLC you're gonna then transition and get your EIN number through the federal government so if you have done things backwards and you've already taken you got your EIN in number you don't have your state number you need to get your state number cuz really everything is done through the state and then the IRS kind of just approves it so you want to get your LLC first if you don't say say if you got your EIN first and then you ll see but they matched up everything went through you're good don't do anything if you're a person where they didn't match say the names didn't match you can do one or two things you can go in and you can cancel your EIN number you can go and cancel it or you can go in and get a new ein fill out the application and so it will match the LLC so if you guys have any questions pertaining to forming urine your LLC and then your EIN definitely type it into the comment section I can definitely go ahead and answer that but the the moral of today the big lesson for today is that you need to file to form your LLC before you form your EIN your LLC is on a state level so then you you go to your state and you say hey I want to start this business these are the names that I'm thinking about this is how I think this is this is all the information by address all the information the state approves it once the state approve it then you go and you go to the irs.gov website apply for AI n and the IRS with the ein application they're going to ask you the information that's on your state information for your business formation so those two go hand-in-hand it can be done what you do one without the other but you just don't want to - you just want to do things right the first time so you're not doubling back and having to do anything else okay if you guys have any questions for me pertaining to Texas or bookkeeping go ahead and feel free to type it in the comments DM me the questions or you can give me a call I offer 15-minute consultations so that we can talk through and see what what business is best for you how to hor made it I also answer questions about business formation and business formation services so if you guys have any questions about that go ahead and reach out to me just remember it's very important to do things right the first time but you know if you don't it's okay you feel the board you are doing things you can fix them it is fixable so if you have any questions feel free to reach out to me but for today that is it I am my Shree Rhodes your tax GPA is helping you to navigate your way through Texas I will see you again next time

Thanks Gabriel your participation is very much appreciated
- Eneida Bitsko

About the author

Eneida Bitsko

I've studied marxian economics at Saginaw Valley State University in University Center and I am an expert in information technology (outline). I usually feel depressed. My previous job was massage therapist I held this position for 27 years, I love talking about travel and unicycle. Huge fan of Cory Booker I practice diving and collect cards.