Apply for your Federal Tax ID / EIN

A Limited Liability Company or LLC is a type of legal structure that provides the limited liability features of a Corporation and the tax efficiencies and operational flexibility of a Partnership. The "owners" of an LLC are referred to as "members." The members can consist of a single individual (one owner), two or more individuals, corporations or other LLCs.

A Single-Member LLC might require an EIN to:

• Hire employees
• Elect to be taxed as a Corporation (either a C or S Corporation)
• File taxes
• Prevent identity theft by using an EIN instead of a SSN
• Comply with any other IRS regulations not listed here

All Multi-Member LLCs will require an EIN since they are considered a Partnership (by default) or a Corporation (by electing to be taxed as either a C or S Corporation).

NOTE - When you establish a Limited Liability Company (LLC), you have a business entity that's legally held separate from its owners providing what is referred to as: limited liability protection.

What is a Sole Proprietor?

A Sole Proprietor is one individual who owns an unincorporated business that pays personal income tax on profits from the business. With little government regulation, they are the simplest business type to set up or take apart, making them popular among individual self contractors or business owners. Sole Proprietors can include Freelancers, Independent Contractors, Household Employers and any business owner that doesn't have partners.

Why Does a Sole Proprietor Need an EIN?

A Sole Proprietor might require an EIN to:

• Hire Employees
• Have a Keogh or Solo 401(k) retirement plan
• Buy or inherit an existing business that you operate as a Sole Proprietorship
• Incorporate or form a Partnership or Limited Liability Company
• File for bankruptcy
• Comply with any other IRS regulations not listed here

Other reasons a Sole Proprietor should consider using an EIN include:

• Prevent identity theft by using an EIN instead of a Social Security Number (SSN)
• Help establish independent contractor status quicker
• Appear more professional like a business instead of an individual

NOTE - A Sole Proprietor / Individual will only be issued one EIN by the IRS for their entire lifetime. What this means, is a person's Social Security Number (SSN) can only be matched to a single EIN.

An Estate consists of the real and/or personal property of the deceased person. The estate pays any debts owed by the decedent and distributes the balance of the estate's assets to the beneficiaries of the estate. An estate arises on a person's death whether the person died with or without a will.

An Estate might require an EIN to:

• Probate assets prior to distribution
• Open a bank account
• File taxes
• Prevent identity theft by using an EIN instead of a SSN
• Comply with any other IRS regulations not listed here

NOTE- When a person dies, the Executor, also known as the Personal Representative or Administrator, must open an Estate in the decedent's name. The Estate requires an EIN, but it can't use the Social Security Number (SSN) of the deceased person because when a person dies their Social Security Number effectively dies with them.

A Trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries.

A Trust might require an EIN to:

• Open a bank account
• Put assets into a Trust
• Setup a Revocable or Irrevocable Trust
• File taxes
• Prevent identity theft by using an EIN instead of a SSN
• Comply with any other IRS regulations not listed here

NOTE - The bottom line is there are several different types of Trusts and depending on which type of Trust you have setup and your specific situation will ultimately determine whether or not you will require an EIN. For example, whether the Grantor's Social Security Number (SSN) or an EIN is used to identify your Trust will depend on three factors: 1) whether the trust is Revocable or Irrevocable, 2) whether the Grantor is alive or is deceased, and 3) whether income-producing assets are being held in the Trust.

A Non-Profit Organization or NPO is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends. Although Non-Profit Organizations are permitted to generate surplus revenues, they must be retained by the organization for its self-preservation, expansion, or plans.

A Non-Profit Organization might require an EIN to:

• Open a bank account
• Hire employees
• File taxes
• Prevent identity theft by using an EIN instead of a SSN
• Comply with any other IRS regulations not listed here

NOTE- The IRS does not require tax returns from religious organizations or from non-profits that are subsidiary groups included on a group return of a parent organization. The IRS also exempts Non-Profit Organizations from taxes if they serve specified purposes such as: "charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals," according to section 501(c)(3) of the federal tax code. To gain an exemption, the group must file an application (either Form 1023 or Form 1024, depending on the type of organization), and provide the IRS with an EIN.

A Partnership is a single business where two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business.

A Partnership might require an EIN to:

• Open a bank account
• Hire employees
• File taxes
• Prevent identity theft by using an EIN instead of a SSN
• Comply with any other IRS regulations not listed here

NOTE - Under the tax rules, a Partnership is a "pass through" business structure. The income and expenses generated by a Partnership are passed along to the partners to claim on their individual tax returns. However, a General Partnership still gets to file a tax return that shows the income that has been allocated to the partners. To complete the Form 1065, "U.S. Return of Partnership Interest" tax return you need an EIN for your Partnership.

An S-Corporation or S-Corp is a special type of corporation created through an IRS tax election. An eligible domestic corporation can avoid double taxation once to the corporation and again to the shareholders by electing to be treated as an S-Corporation.

An S-Corporation might require an EIN to:

• Open a bank account
• Hire employees
• File taxes
• Prevent identity theft by using an EIN instead of a SSN
• Comply with any other IRS regulations not listed here

A Corporation or C Corporation is an independent legal entity owned by shareholders. This means that the corporation itself, not the shareholders that own it, is held legally liable for the actions and debts the business incurs.

A Corporation might require an EIN to:

• Open a bank account
• Hire employees
• File taxes
• Prevent identity theft by using an EIN instead of a SSN
• Comply with any other IRS regulations not listed here

A church is any place of worship including synagogues, mosques and temples regardless of its adherents' faith or religious belief. The IRS recognizes churches as 501(c)(3) charitable organizations if they meet the requirements.

• Eligibility for grants
• Eligibility for special mailing rates
• Viewed as a legal entity separate from members
• Limited liability
• Fast expansion potential
• Simplest administration