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Dual EIN’s for LLC - Questions!

    • 1 posts
    January 28, 2008 5:17 AM EST

    Hello all,
    I`m new to SuN and looking forward to joining the community.  I`m in the process of starting a home based online e-tailer biz and have run into some tricky tax questions.  My accountant seems confused also.... I`m looking for a new one!

    I`ve established my Articles of Org with the State Corp. Comm. as an individual member LLC.  When I went to obtain my Fed. EIN I discovered that they wanted me to get TWO numbers if I intend to have employees within 12 mos. (See excerpt below).

    IRS regulations require a single member limited liability company that is (1) owned by one individual and (2) has or will have employees within the next 12 months to have two EINs. One EIN is assigned to the individual owner (as a sole proprietor) and one is assigned to the LLC. If you do not already have an EIN as a sole proprietor, you cannot use the online EIN application to apply for the LLC EIN. Please call the Business and Specialty Tax Line at (800) 829-4933 between 7:00 a.m. and 10:00 p.m. local time and an assistor will take your information and assign you the two required EINs. We are sorry for the inconvenience.
    http://www.irs.gov/businesses/small/article/0,,id=102767,00. html

    I spoke to the IRS, and have already received both EIN`s as mentioned above.  If I understand this correctly, the sole-prop. EIN is for the taxes I will pay on earnings as the individual owner, and the second EIN is for the LLC that will pay taxes as an employer (whenever I hire employees).

    I`m currently registering with the state (VA) tax dept and Employment Commission, and I`m uncertain which Fed. EIN to reference during registration?  I spoke to their registration dept and they seemed more confused by two numbers than I am.  I`m lost as to whether I should be using the sole-prop number or the LLC number!  Also, which number should I give to vendors and suppliers as I establish my wholesale accounts, etc.?

    My hunch is that I will use the sole prop. number for almost everything except for unemployment taxes WHEN I actually hire employees down the road.  Does anyone have experience or advice with this dual number confusion?

    Thanks!
    Andy

    • 59 posts
    January 28, 2008 5:46 AM EST
    Andy,

    I believe your understanding of how to use your Federal EINs is correct.  If the reason you need to provide your Federal ID number is related to your employee`s withholding and/or remitting their taxes, you use your LLC EIN number, for all other reasons you use your Sole Proprietor EIN number.

    Best wishes,
    Gina

    ---
    Gina L. Gwozdz, CPA
    http://GLGcpa.com
    http://TaxTreasures.com