Home: Message List - Tax ID or Social Security number for single member llc?

Re: Tax ID or Social Security number for single member llc?

okinawa — Wed, 26 Aug 2009 01:01:30 GMT

Would having independent contractors be considered an employee? And since I live in a community prop state, if my husband is one of those independent contractors and does work for me under my LLC is that considered an employee?

Thanks.

Re: Tax ID or Social Security number for single member llc?

Lighthouse24 — Sat, 10 Jan 2009 05:40:13 GMT

You don't need an EIN, and since a single member LLC is taxed as a pass-thru entity, having one (or not) won't affect your income taxes.

Having an EIN for the LLC does give the business its own identity, which is important (1) so you can start building credit for the business, and (2) so you don't have to give out your SSN for every business transaction that requires some type of tax ID number.

Does it protect your personal assets? Maybe in theory, but not really in practice. As a new business, you are going to have to personally guarantee almost any debt that's assumed by the LLC, so if the company doesn't pay, creditors can and will come after you personally. Also, as a single member LLC with no employees, anything the company ever does will, by default, be the result of a decision you made or an action you took -- so if something goes wrong and there's a lawsuit, it will name both you (personally) and the LLC as defendants, and if you lose, they'll get their money from whichever entity has it.

Hope that helps. Good luck.

Re: Tax ID or Social Security number for single member llc?

tashmaxx — Sat, 10 Jan 2009 03:50:22 GMT

Hi. That is correct. If you are a single member LLC you do not have to have a separate EIN if you have employees, but as far as protecting your personal information I would think it depends on what type of business you have. You should talk with a Tax Attorney.

Tax ID or Social Security number for single member llc?

chicagorm — Sat, 10 Jan 2009 00:27:49 GMT

Hello, I am confused on using an EIN vs soc number. According to http://www.irs.gov/businesses/small/article/0,,id=97872,00.html my single member LLC does not require a EIN as I will never have any employees or meet any of those criterias. However, I am wondering if:

I. If I need an EIN to protect my personal assets which LLCs are supposed to do?

2 If using an EIN may be more advantagous for income taxes?

Any help and information would be greatly appreciated - Thanks