A limited liability corporation always brings with it questions from business owners. If you form a limited liability corporation, how does that impact what you have to do from a tax reporting standpoint? What type of requirements does a limited liability company have in comparison to something like a corporation or a non-profit organization or an s-corporation? Believe it or not, there are not many differences when talking about an LLC from a tax reporting standpoint. Just like any other business organization, you need to have everything roll up under one unique identifier. The nine-digit employer identification number is that identifier. Understanding the application process to obtain the federal tax identification number is the first step before you can have the identifier in-hand.
Steps to Getting a Tax ID (EIN Number) for an LLC
- Gathering up the Required Information
- Obtaining an LLC EIN Online
- Varying LLC EIN Application Methods
- Getting the LLC EIN By the Number
- Why the LLC Needs an Employer Identification Number
You need to gather up a series of information in which the Internal Revenue Service will require. For the LLC to obtain an employer identification number, you need details on the LLC itself, as well as the responsible party.
The details on the limited liability corporation will include the date of origination, principal address of the business, as well as the official name of the business. Once you have these details you are good on the limited liability corporation front.
The next step is the naming of the responsible party. This is the individual that will do all communication with the Internal Revenue Service, represent the company in the eyes of the IRS. The responsible party needs to be an individual with a Social Security Number or Individual Taxpayer Identification Number. Information you need on the responsible party includes:
- The person’s full name
- The individual’s date of birth
- Legal address
- Social Security Number or Individual Taxpayer Identification Number
Obtaining an employer identification number for the limited liability corporation online is the easiest path to take. Many benefits will go along with applying for an LLC federal tax identification number online. They include:
- The ability to complete the application and submit it for processing all in less than one hour.
- You get an immediate response from the Internal Revenue Service. If there is a follow-up or additional details you must provide, there is a lot of opportunities to do so without delaying the overall process.
- You can get assistance from a Tax ID service professional to complete the online application process.
The other two common methods that folks use to obtain an employer identification number for an LLC include applying via a fax machine, or through the mail. For both of these methods, you need the most up to date and a physical copy of the traditional Internal Revenue Service application form for an employer identification number.
- With the mail application method, you will be completing the form and submitting it to the Internal Revenue Service through the postal service.
- The fax application method is similar in that you complete the form completely before using a fax machine to send it to the Internal Revenue Service for processing.
In both of these cases, more time will elapse before you have your federal tax identification number, but you can get the help of a Tax ID service provider.
When you think about the numbers, how long should you be expecting to wait to obtain your employer identification number like a limited liability corporation? As an LLC, the length of time you will be standing by for your EIN is going to depend wholly on how you choose to apply for the number originally.
The length of time which is the longest is going to be the mail application method. When you look at the mail application method, you can expect to wait around four to six weeks before you have the IRS generate and return your federal tax identification number to you.
The fax method is going to be second in terms of speed. Within around five to seven business days is when you can expect to have your EIN for your LLC back to you and in your hands. The longer period is due to the manual processing necessary on the part of the Internal Revenue Service.
The online application method is going to be the fastest by far. With the online application method what you can expect is for it to take around 60-minutes in total. In less than one hour you can go through the entire application process and end up with the generation of your federal tax identification number.
What are some of the big reason as to why your limited liability corporation would need to have an employer identification number? When you think about an EIN, you need to think of it in the context of its true purpose. It is to help the Internal Revenue Service identify with any of the dealings of your LLC. If you want to file a tax return in the name of the LLC, having a federal tax identification number is paramount. The same goes for if you want to open a bank account, whether it be a savings or checking account, in the name of the LLC. Hiring employees will also require you to have an EIN.
In the event, you are forming al limited liability corporation, you have to get a handle over the application process for an employer identification number. You need to grasp the process, what you will be expected to follow. It also comes down to knowing what the information requirements include. Once you have those requirements, the execution of the application needs to be a priority. To comply with the Internal Revenue Service, you need the identifier so the information rolls up, can be tracked under your nine-digit number. Having that before you perform any business as a limited liability corporation makes the most sense.