Will Social Security Number Work As An EIN For An LLC

By Bazal Razzaq

Chief Editor

Updated: October 02, 2023

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Social Security Number (SSN) is essential for individuals, as is Employer Identification Number (EIN) for business. If you are a person who wants to start an LLC, then you would need to comply with the norms of the state and the federal government. The EIN is a necessary aspect of starting a business across the States. It is a 9-digit number used by the Internal Revenue Service. Every new business would have a concern around it as it is something that every business needs to know about, and if not used correctly, then it could lead to a concern for the LLC.

While some would question whether they are a business without employees, so do they need to file an EIN or not, several things concern this topic. In this article, we will look into those aspects and ensure that everything is in check so that you know the requisites to have the perfect LLC business. So, without further ado, let’s get right into it:

What Is Important For Single-Member LLCs

A single-member LLC is the one where there’s just one person involved in the LLC. There are no employees in this LLC, and one person alone can be the sole owner of the business. An individual can file their taxes using their SSN, and they won’t have to worry about any state, local, or federal taxes or organizations coming to them for clarification.

This works well when you have a single-member LLC or business. You would have to check for information on the respective state website, and the details will come to the front for you. It is important to understand that some businesses would be treated differently if they put the information on file pertaining to this and want their single-member LLC to be considered as a corporation. Appended are the details for your reading pleasure:

How would you want your LLC to be notified?

A sole proprietorship is the one where you don’t get liability protection. A single-member LLC will be the one that provides liability protection. The charges in this situation would vary, and one would have to look through the details that are important for a business. You would need to file different forms based on the situation.

You will have to file IRS using Schedule C. The form used for filing will be Form 1040. There will be no separate tax implied in this condition. The owner’s taxable income will be the taxable income for the business as well in such a condition. It will only ease the process for the business and the owner.

Different Types of Corporations: C and S Corporations

Now that we have the LLC tax details checked, the next step is to understand if your business is a C corporation or an S corporation. The EIN aspect will vary depending on the kind of business you are notified to the federal, state, or local authorities. So, without further ado, let’s get down to business about the types of corporations:

C Corporations

A C Corporation is one that will have to file Form 1120, US Corporation Income Tax Return. The no-flow-through items will then have to be declared using Form 1040. The tax will be on the income after taking off deductions, credits, and any loss.

S Corporations

A single-member LLC or multi-member LLC can apply for this by filling in Form 2552. The business that is marked as an S Corporation doesn’t need to file tax on corporate profits. This requires individuals to file their individual income tax, and the same shall be taken into account against the business’ overall profit.

Why Filing Taxes Using SSN Is Better?

Everyone has a different Social Security Number (SSN), and this number bifurcates everyone, thereby keeping the records handy. It keeps track of everyone’s tax filings and helps the state, local, and federal governments understand the tax filing, thereby helping avoid tax fraud.

The IRS is able to gauge information about an individual’s filing, and this helps in avoiding tax fraud for the individual or a business. It is, therefore, important to keep the details in check, as that is vital in every situation.

Does It Provide Access To Benefits?

The correct filing can be done by anyone, and it opens up a plethora of benefits, such as Medicare, Social Security, and retirement benefits for an individual and the business alike. It helps anyone entitled to their business requirements.

This helps everyone as the person involved in the business can file their specific taxes and thereby claim specific access to benefits for themselves and their respective business. The clarity of information and the accessibility to track it make it easier for anyone to get access to benefits.

Does The Business Get Tax Refund Benefits?

In the event that you have paid more tax than what was required, your SSN can come in handy to process your tax return. It helps you ensure that you get your due in no time, and there’s nothing to worry about.

The same applies to your business, which may be a multi-member or single-membered. The details get verified by the government, and the refunds are accordingly issued. Taxpayers can get their money back in quick time, and that comes in handy.

Why you should File a Separate EIN-Based Tax Return?

The EIN-based tax return helps you create a separate history for your business. It helps you stay away and ahead of your personal credit history. This way, your business will have a separate space of its own, and the banks can refer to it to provide you with business loans, credit cards, and other payments in their respective space.

It will help banks or other financial institutions analyze your LLC standing and find out what fits well for your business. This way, you will be able to differentiate between your personal report and your business report. Your business also becomes a special entity for itself at the end of the day.

Does EIN Help Me Open A Business Bank Account?

Yes, EIN helps you open your business bank account. It’s always a good idea to keep your personal and professional business transactions away from each other. A bifurcation ensures that things are in order and you don’t subject yourself to a financial catastrophe.

A separate business bank account lets you keep a clear input on the cash coming in and going out of your business. It leaves no room for error and makes it viable for your business to become a valuable asset for you and the state. You can always do multiple things using this aspect for your business.

Does EIN Help In Hiring Employees For Business?

Indeed. If you want to hire employees for your business, then you need to have an EIN. You would need it to help the IRS keep track of your business taxes and wages and issue tax forms such as W-2s or 1099s to employees and contractors.

Payroll taxes can be understood and worked upon if you have an EIN for your business. This EIN Number helps your business in the long run as you are able to report information to the relevant authorities for your employees and contractors.

How Does One Get An EIN For Business?

First, you would need to validate if you need an EIN or if you want to continue with your SSN number. In the event that you would need an EIN for your business, you can do so online or via fax and mail. The process of doing it online is quick, or rather instant, while the offline process takes some additional time.

You are required to fill in the relevant and required information in one go when doing it online and process the information offline through fax or mail. The details are available for everyone’s perusal on the IRS website, and a Form SS-4 must be downloaded for the offline process. Your business must comply with the details at all times to ensure no discrepancy occurs.

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Frequently Asked Questions​ (FAQs)

You are required to have an EIN for your single-member LLC, but you also have the choice to skip it and work through your SSN if you are not willing to hire people for your business.

As an individual and a business, you can use your SSN as an EIN for your business. The use of these two helps you bifurcate your personal and business entities individually, and you won’t need to worry about filing taxes.

Absolutely. IRS is able to track information about your business in case you miss out on sending the tax information to the Revenue Service. You would need to keep the two separate to avoid any hassles.

In the event of anything like this happening, you are required to share the completed Form 14039-B, Business Identity Theft Affidavit, with the IRS. The authority will be able to keep a check on the required information.

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