Do I need an EIN for an LLC in Georgia?
Starting a business comes with many responsibilities and legal requirements. Some of these responsibilities include the payment of taxes on business profits, collecting and paying sales tax, withholding and paying employee income tax, and payment of other applicable taxes. That means, after forming a Georgia LLC, the business owner(s) must apply for an Employer Identification Number (EIN) at both state level and federal level.
What is an Employer Identification Number (EIN)?
The Employer Identification Number is to a business what a social security number is to an individual. It’s an exclusive nine-digit number that is assigned by the IRS to every business as a way of identifying any business that operates within the United States. Because it is unique by design, it is never reissued to another business. Any business owner who sees words like Federal Employer Identification Number or Tax Identification Number (TIN) should know that they refer to the EIN.
The EIN is used for all tax transactions. It is not as sensitive as a social security number, so a business can share it freely through publications and the internet. This doesn’t mean that businesses can be careless about the EIN because the number can be used for identity theft if it falls into the wrong hands.
All forms of businesses (limited liability companies, sole proprietorships, partnerships, nonprofits, government agencies, estates, or trusts, or corporations) can apply and be given an EIN. The number never expires and can be used as long as a business is operational.
Does an LLC need an EIN?
An LLC needs an EIN if it has employees, if it files tax returns for employment, excise duty, alcohol, tobacco or firearms, if it withholds taxes on income paid to non-resident aliens, or if it is involved with trusts, estates, real estate mortgage investment conduits, nonprofits, farmers’ cooperatives and plan administrators. Whether an LLC employs only one person or thousands of people, it needs an EIN and it is given one. Here are the reasons why a Georgia LLC needs an EIN.
- The Georgia LLC needs an EIN so that it can pay its employees and pay over to the government any employee income tax withheld through the payroll.
- The LLC needs the EIN to pay federal taxes if has chosen to be taxed as a C corporation.
- The state of Georgia requires LLCs to pay state income tax if they choose to be taxed as corporations. For that reason, a state EIN is needed in addition to the federal EIN.
- The EIN is required when the LLC opens an account with financial institutions such as credit unions, banks and brokerage houses. These institutions will not open financial accounts unless an EIN is available.
- The LLC is required to produce its EIN when it applies for business licenses.
- When the LLC acts as a subcontractor, it must give its EIN to the primary contractor that will then report to the IRS all business income paid to the LLC.
How to get an EIN
Business entities that plan to operate in the U.S., including LLCs in Georgia, can apply for an EIN by phone, online, fax, or by mail. It doesn’t cost anything to apply for an EIN.
After forming an LLC in Georgia, the business owner should immediately apply to the IRS for an Employer Identification Number. It’s better to do it at that point than to worry about it when tax returns time arrives. The LLC owner(s) can fill the form available on the IRS website and submit it electronically. Once the IRS has validated the information on the form, it assigns the EIN to the LLC immediately.
Getting the LLC formed and getting the EIN and other legal requirements can be too much for startups. Fortunately, help is available from online service providers like TRUiC, who provide a lot of business guidelines and information. Visit site….