Can I Use SSN Instead of EIN? Understanding EIN and SSN for LLCs

For federal income tax purposes, a single-member LLC classified as a disregarded entity generally must use the owner’s social security number (SSN) or employer identification number (EIN) for all information returns and reporting related to income tax. An EIN is a Federal Tax ID which is a number used by the IRS to identify your business for tax purposes.

EIN Uses for Business

An EIN is primarily used by foreigners to open a business bank account in the U.S. for their LLC. Your EIN will also be used for U.S. tax reporting and filing requirements, hiring employees (if applicable), and for obtaining licenses/permits. Additionally, your LLC’s EIN is required for account registrations for platforms like Amazon FBA, eBay, YouTube, Google Adsense, Paypal, Shopify, Stripe, and others.

Single-Member LLCs and Tax IDs

The IRS mandates that certain types of LLCs must have an EIN. However, sole proprietorships and single-member LLCs can use their SSN if they don’t elect to file taxes as a corporation. When you are a sole proprietorship, you can fill out W9 forms using your SSN, but it is recommended to apply for an EIN because it offers more privacy and separation between personal and business finances.

If you have a Sole Proprietorship with an EIN and convert it to an LLC, you will need a new EIN. Technically, single-member LLCs and sole proprietorships are not required to have an EIN as they are taxed as individuals.

You can apply for an EIN by filling out IRS Form SS-4 and submitting it to the IRS. Alternatively, you can apply online at the IRS website. Processing usually takes about four weeks.

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