Which EIN to provide on W9 as SMLLC?

[alex128]

I have a single member LLC and am confused on which "type" of EIN to provide on my W-9. I've seen multiple, conflicting answers on this topic and am hoping to find some clarity.

Should I provide the LLC's EIN (the EIN that I would request on behalf of my SMLLC) or "my" EIN (the EIN that I would request as a sole-proprietor) on a W-9 form?

Instructions on the W-9 form state:

" If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). Do not enter the disregarded entity’s EIN."

Since my SMLLC is a disregarded entity, it is my understanding that I can not put my LLC's EIN on the W-9 form. Instead, I am required to either put my SSN on the form or -to avoid sharing my SSN- apply for a different EIN as a sole proprietor. Is this correct? Do I essentially need 2 EINs? 1 as a sole proprietor to "replace" my SSN on W-9 forms and a 2nd for my LLC to open a bank account?

If the above is correct, how to do go about applying for each EIN? When using the IRS online EIN application system, you have to choose a business structure. If you select "sole proprietor", it takes you to a description that states that you should not choose this structure if you have an LLC. Is it even possible to request an EIN as a sole-proprietor now that I have an LLC?

On the flip side, some are saying that as a SMLLC/disregarded entity they've only ever used their LLC's EIN on W-9s. Is there a scenario where this is a valid approach? Since both "types" of EINs would be linked to my SSN, does it even matter??

Very confused by all the contradictions.

For context: I do not have any employees, do not need to file excise taxes, and do not meet any of the other indicators listed by the IRS that would require me to obtain an EIN for my LLC. I would be using my LLC's EIN to open a bank account. This is for freelance work as a subcontractor. I would have the contractor submit payments to my business bank account.

[Anonymous_]

https://ttlc.intuit.com/community/business-taxes/discussion/when-to-use-ein-or-ssn-for-single-member...

[alex128]

Hi @Anonymous_ ,

Thank you for the link to the previous post.

The IRS page (https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-compan...) makes it clear that a SMLLC is considered a disregarded entity for tax purposes and there for I cannot use the LLC's EIN when filling out W9s/1099s/etc.

My question remains then, would this mean having 2 EINs as a SMLLC? 1 to avoid providing my SSN on W9s and a 2nd to open a bank account.  And, how do I apply for an sole proprietor EIN when I already have an LLC?

[Critter-3]

WHY would you get a second EIN for a sole prop ???   Do not do that.  

If you are filling in a W-9  for an entity requesting it then read the W-9 instructions specifically page 3: 

https://www.irs.gov/pub/irs-pdf/fw9.pdf

[alex128]

Because I do not want to put my SSN on an W-9 form.

Scrolling down to page 4 of the W-9 form to Part I. TIN instructions states: "If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has
one). Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN."

I am a SMLLC that is a disregarded entity. Therefore, I can not enter my LLC's EIN, I can only put my SSN or my (the owner's) EIN.

I know it sounds ridiculous, but having 2 EINs seems to be the solution that is floated around both on this and other message boards if a person wants to a) not use their SSN as a SMLLC and b) wants to open a business bank account. I would agree that it is totally silly and I would prefer to just have one.

I've seen comments on people using their SMLLC's EIN on W-9 forms in blatant disregard of the instructions "because nothing bad has ever happened". However, this seems like poor business practice and I would like a firm explanation as to how this is okay before I just blindly participate.

[js221]

Did you end up getting 2 EINs, using your SSN, or using the SMLLC's EIN? Like you, I keep finding contradicting advice on what to do and would prefer not to give my SSN to every client.

[Anonymous_]

If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN.

If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). If the LLC is classified as a corporation or partnership, enter the entity’s EIN.

[Anonymous_]

3. You must show your individual name on line 1, and enter your business or DBA name, if any, on line 2. You may use either your SSN or EIN (if you have one), but the IRS encourages you to use your SSN.

[js221]

Thank you for the response. I am in the exact same situation as the original poster in that I have a SMLLC that is disregarded as an entity separate from its owner, but I do not want to give my SSN to every client that needs a W9 from me. I know someone in the same situation who says she puts her SMLLC’s EIN on W9s and has not had any issues doing that, but I am hesitant because it does not follow the instructions on the form and I have read that it can create discrepancies in how income is reported to the IRS.

It seems the solution is to apply for and obtain an EIN for an individual (myself) and use that on the W9. That way I follow the IRS’s instructions while also limiting the risk of a careless or nefarious client potentially exposing my SSN. I have read a couple of posts saying not to apply for an Individual/Sole Proprietor EIN to use on a W9 for an LLC because an EIN is meant for a business, not an individual, but since the IRS ties the Individual EIN directly to my SSN, would it really be a problem?

[Anonymous_]

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@js221 wrote:

 .....since the IRS ties the Individual EIN directly to my SSN, would it really be a problem?

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The instructions state the IRS prefers that an SSN be used but that either an SSN or EIN is acceptable.