Hello,
Recently I have applied(and now active status) for an LLC. I am the sole owner and no employees(domestic LLC in Georgia). Do I need to file for an EIN? If so should I state how I should be taxed(s corp,sole,etc.)?
I do rehabs and flip for profits(all short term properties). Any help would be greatly appreciated.
Thanks,
Matt
Single member limited liability companies, which are classified as disregarded entities, do not have to apply for a Federal Taxpayer I.D. number unless you want to. The SS-4 application has a section specifically for disregarded entities that will explain this in more detail. However, it might be easier in dealing with financial institutions, lenders, etc., if you have a Federal Taxpayer I.D. number.
mazoo,
you need an EIN to open a biz banking account.
LLC is pretty useless without it. if the LLC isn’t accepting checks and you personally are collecting cash, that defeats one of the main purposes of an LLC.
can’t you think of anyone to be your “partner”. someone you really trust. i think that makes things easier, in terms of solidifying LLC as a true business entity.
The bank should accept your social security number as the EIN when you are using single member limited liability companies. Form SS-4 explains this. The problem is that most bank employees do not understand this and you have to fight the battle to get to the right manager in order to get your Soc Sec number accepted. It is much easier to apply for your own EIN so that you don’t have to fight the battle.
I disagree with the prior poster regarding bringing a partner into the LLC, unless you need a partner for any specific reason, such as capital, resources, expertise, etc. The single member LLC provides the legal protection that you need as long as you respect the legal structure (i.e. legal documents, separate bank accounts and assets, etc.). The LLC becomes a multiple member LLC once you add a partner and then would be treated as a partnership for income tax purposes (unless you elect corporate taxation). The partnership will create all sorts of future challenges, especially if you ever decide to go your separate way using a 1031 exchange. If I ever need a partner, I would recommend each of the partners setting up their own single member LLC so that each have the liability protection, but each are still disregarded entities and treated as individuals for income tax purposes, so that each can go their separate ways in the future. You can easily create a tenant-in-common agreement to “govern” the management of the property.