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Taxathrone
Level 2

Single Member LLC's EIN or Owner's EIN Tax Filing Question

My situation:

  • Started my own business in 2019. (It's still going! Woo hoo!)
  • Formed a single member LLC (SMLLC) for the liability protection.
  • Business coach told me to get an EIN in my LLC's name to open a business bank account and also read that it was a good idea to get an EIN for your LLC, so that when vendors request a W-9 you don't have to provide your SSN. Yes, please.
  • Following advice above, I got an EIN in my LLC's name and used it to open a business bank account.
  • Didn't have income in 2019 that reached the threshold to generate tax forms to me (1099s), but filed 2019 taxes with what I'd made (lost), putting my LLC's EIN on line D of Schedule C per the IRS instructions that "if you are the sole owner of an LLC that is not treated as a separate entity for federal income tax purposes, enter on line D the EIN that was issued to the LLC (in the LLC's legal name) for a qualified retirement plan, to file employment, excise, alcohol, tobacco, or firearms returns, or as a payer of gambling winnings. If you do not have such an EIN, leave line D blank."
  • Got my first W-9 and saw that it (see page 4) actually says (!!!) that "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."
  • Was surprised by this and wasn't comfortable giving out my SSN to this vendor, so I looked online for how other folks had handled this, and found that people often used their SMLLC's EIN despite the clear instructions not to (which seemed like a bad idea) or would request an EIN in their own name (an "owner's EIN") and then provide that EIN, since the W-9 instructions say an owner's EIN can be used.
  • So, I subsequently requested an EIN in my own name (just as a sole proprietor) and have used that on W-9s and for PayPal and Stripe 1099-Ks.
  • Now, I just got a 1099-INT from my bank for the business bank account that I opened in my LLC's name with its EIN, and so of course the 1099-INT has the LLC's name (just its name, in fact) on it and its EIN.

My main questions:

 

Is any of this a problem? If it is, what should I do to fix it?

 

My secondary / specific questions:

  1. Does my bank need to re-issue the 1099-INT in my name and SSN or EIN (or at least with my SSN or EIN?), per the IRS that "for federal income tax purposes, a single-member LLC classified as a disregarded entity generally must use the owner's social security number (SSN) or employer identification number (EIN) for all information returns and reporting related to income tax"?
  2. Schedule C instructions say that "if you are the sole owner of an LLC that is not treated as a separate entity for federal income tax purposes, enter on line D the EIN that was issued to the LLC (in the LLC's legal name) for a qualified retirement plan, to file employment, excise, alcohol, tobacco, or firearms returns, or as a payer of gambling winnings. If you do not have such an EIN, leave line D blank." I got the LLC's EIN to open a bank account (which is specifically allowed by the IRS), but does that mean that I should keep putting my LLC's EIN on line D of Schedule C or leave line D blank when I file for 2020 and in the future?
  3. Is the IRS going to have a problem that I'm using the EIN in my name ("owner's EIN") for tax purposes (W-9s, 1099-Ks) for my LLC, since the IRS doesn't allow me to use the LLC's EIN? Will they have issues connecting that the 1099s they receive with my EIN number are being reported on my Schedule C with my LLC's EIN number and instead be looking for a separate Schedule C with the EIN number in my name / "owner's EIN" on it?
2 Replies
martinmarks
Level 10

Single Member LLC's EIN or Owner's EIN Tax Filing Question

Your message is confusing.....do you have 2 EINs....one in your name as sole proprietor and another in the name of the LLC? Doesn't matter a lot because the LLC's EIN is still linked to your SSN. 

Taxathrone
Level 2

Single Member LLC's EIN or Owner's EIN Tax Filing Question

@martinmarks -- yep, in regards to your question, that is correct.

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