Frequently Asked Tax Questions And Answers
Keyword: Tax Identification Number
12.1 Small Business/Self-Employed/Other Business: Entities: Sole Proprietor, Partnership, Limited Liability Company/Partnership (LLC/LLP), Corporation, Subchapter S Corporation
No, you will not need a separate Federal Tax ID number for the LLC if you are the sole owner of the LLC and the LLC has no employees. If you are the sole owner of the LLC and the LLC has employees, you will need to get a separate Federal Tax ID number, if you choose to have the LLC report and pay employment taxes with respect to employees of the LLC. If you are not the sole owner of the LLC, you will need a separate Federal Tax ID number for the LLC. See Notice 99-6, 1999-1 CB 321.
References:
- Publication 1635 (PDF), Understanding your EIN - Employer identification Number - IRS
- Form SS-4 (PDF), Application for Employer Identification Number
- Form 8832 (PDF), Entity Classification Election
Yes, an employer identification number, or EIN, is also known as a taxpayer identification number, or TIN. A sole proprietorship that has no employees and files no excise or pension tax returns and a LLC with a single owner (where the owner will not be filing employment tax returns) are the only businesses that do not need an employer identification number. In these instances, the sole proprietor uses his or her social security number as the taxpayer identification number.
References:
- Publication 334, Tax Guide for Small Business
- Publication 1635 (PDF), Understanding Your EIN
A sole proprietor who does not have any employees and who does not file any excise or pension plan tax returns is the only business person who does not need an employer identification number. In this instance, the sole proprietor uses his or her social security number as the taxpayer identification number.
References:
- Publication 334, Tax Guide for Small Business
- Publication 1635 (PDF), Understanding Your EIN
- Form SS-4 (PDF), Application for Employer Identification Number
If you already have an EIN, and the organization or ownership of your business changes, you may need to apply for a new number. Some of the circumstances under which a new number is required are as follows:
- An existing business is purchased or inherited by an individual who will operate it as a sole proprietorship,
- A sole proprietorship changes to a corporation or a partnership,
- A partnership changes to a corporation or a sole proprietorship,
- A corporation changes to a partnership or a sole proprietorship, or
- An individual owner dies, and the estate takes over the business.
This list is not all inclusive. Please refer to the website under Business, then Employer ID Numbers.
References:
- Publication 1635 (PDF), Understanding Your EIN
- Tax Information for Business
In general, businesses are required to obtain the TIN from vendors if they are required to file any return, document or other statement that calls for the taxpayer identification numbers (TINs) of other taxpayers. Form W-9 (PDF), Request for Taxpayer Identification Number and Certification, can be used to make the request. The business should also maintain the verification of these numbers in their records.
References:
- Form W-9 (PDF), Request for Taxpayer Identification Number and Certification
- Form 1099 General Instructions