If you have newly set up an LLC or a Limited Liability Company, and you have not applied for a federal tax identification number or EIN, then you might not be able to file your taxes. The number of members (owners of an LLC) and the characteristics of the LLC will determine what you can use for a tax identification, according to the IRS or the Inland Revenue Service.
If an LLC is a single member and has no employee, then the owner’s Social Security number can be used to file his or her taxes. All LLCs with employees, and all LLCs with more than one members must use an EIN to file taxes.
An LLC needs to submit the federal tax id application to obtain an EIN first, before it can take part in a Keogh retirement plan, or if it withheld taxes on income other than wages, or paid to a non-resident alien. Some banks may require an LLC to provide an EIN to open a bank account for banking purposes.
An LLC can easily apply for EIN online just by following a few simple steps. These days, it is safer to use an EIN due to the increasing cases of stolen Social Security numbers that might create havoc to a personal credit record or used for fraudulent purchases.
Today, LLC online filing is convenient. For a single member LLC, the LLC entity is disregarded and the single member will need to fill out a Schedule C attachment in addition to Form 1040. The schedule C will report the income and deductions of your business activities, and if there is a profit, the profit is reported with your income on your Form 1040. For a multi member LLC, the entity type is treated as a partnership. Each member will need to fill out Form 1065 and to report income, deductions, and credits on their tax return.