LLC and EIN

[agag2]

Hi

I need to open several accounts on eBay / Paypal / Amazon but I will need to provide an EIN for each one.

My question is can I get an EIN for an LLC? I thought LLCs must use the owners EIN.. IS there a way for each LLC to get an EIN?

Thanks

[thready]

yes you can. a way there is.

[jeffweico]

Any LLC can get an EIN. But there is a difference between LLC TYPES.

The first type of LLC is one in which there is only one owner. It is usually referred to as a single-member LLC. The IRS considers it a "disregarded entity". It will issue an EIN to the LLC, but when Amazon/PayPal verify the EIN they would do so using the EIN and YOUR REAL NAME. So, single member LLC's are rarely used for stealth.

The second type of LLC is a multi-member LLC and has 2 or more owners. This is usually considered a partnership (although it CAN be a corporation, but that is another issue altogether). This type of an LLC files a tax return each year but does not actually pay any tax, it just tells the IRS how much each member was paid and issues a 1099 to each member. When Amazon/PayPal verify THIS type of LLC, the IRS matches on the EIN and the LLC NAME. THIS is the type of LLC that you want for stealth purposes. The other member can be ANYBODY, your wife or girlfriend, mother, friend, or whomever. This person can be paid out very little of the profits of the LLC. In an LLC, it can have many members. The way the profits are divided is spelled out in the "operating agreement" that is filed with the state. The other member WILL have to pay taxes on their portion of the profits.

Corporations can also be used, but I don't recommend them because the PAPERWORK involved is much more complicated and there is a lot more of it.

Whichever way you decide to go, you should seek the advice of a tax professional first. It does not cost all that much and the way that you are set up can end up affecting the amount of taxes that have to be paid. Each one of these setups has its own tax advantages and that gets VERY COMPLICATED. If you decide to do it yourself, that is up to you, but by saving the couple of hundred dollars on the tax professional, you could end up paying thousands more dollars in taxes unnecessarily.

PLEASE don't PM me for tax advice because taxes are NOT my area of expertise.

[agag2]

Originally Posted by jeffweico

Any LLC can get an EIN. But there is a difference between LLC TYPES.

The first type of LLC is one in which there is only one owner. It is usually referred to as a single-member LLC. The IRS considers it a "disregarded entity". It will issue an EIN to the LLC, but when Amazon/PayPal verify the EIN they would do so using the EIN and YOUR REAL NAME. So, single member LLC's are rarely used for stealth.

The second type of LLC is a multi-member LLC and has 2 or more owners. This is usually considered a partnership (although it CAN be a corporation, but that is another issue altogether). This type of an LLC files a tax return each year but does not actually pay any tax, it just tells the IRS how much each member was paid and issues a 1099 to each member. When Amazon/PayPal verify THIS type of LLC, the IRS matches on the EIN and the LLC NAME. THIS is the type of LLC that you want for stealth purposes. The other member can be ANYBODY, your wife or girlfriend, mother, friend, or whomever. This person can be paid out very little of the profits of the LLC. In an LLC, it can have many members. The way the profits are divided is spelled out in the "operating agreement" that is filed with the state. The other member WILL have to pay taxes on their portion of the profits.

Corporations can also be used, but I don't recommend them because the PAPERWORK involved is much more complicated and there is a lot more of it.

Whichever way you decide to go, you should seek the advice of a tax professional first. It does not cost all that much and the way that you are set up can end up affecting the amount of taxes that have to be paid. Each one of these setups has its own tax advantages and that gets VERY COMPLICATED. If you decide to do it yourself, that is up to you, but by saving the couple of hundred dollars on the tax professional, you could end up paying thousands more dollars in taxes unnecessarily.

PLEASE don't PM me for tax advice because taxes are NOT my area of expertise.

Thanks jeffweico! Is it possible to set up a multi-member LLC if I don't have another member? I mean, it's a one man job and I don't really have anyone to be the other member.. (I assume I'd need the other persons SSN and I don't want to tell anyone why I need their SSN)

Also, I've deduced from your post that an LLC pays taxes once, unlike a C corporation, correct? (i.e, once on company earnings and once on individual earnings)..

[thready]

Originally Posted by agag2

Thanks jeffweico! Is it possible to set up a multi-member LLC if I don't have another member? I mean, it's a one man job and I don't really have anyone to be the other member.. (I assume I'd need the other persons SSN and I don't want to tell anyone why I need their SSN)

Also, I've deduced from your post that an LLC pays taxes once, unlike a C corporation, correct? (i.e, once on company earnings and once on individual earnings)..

May i suggest that if you dont want to wait for an answer, you can find your answer outside of this forum using google. Or both. Post question then go search on google while waiting for a response.

[jeffweico]

Originally Posted by agag2

Thanks jeffweico! Is it possible to set up a multi-member LLC if I don't have another member? I mean, it's a one man job and I don't really have anyone to be the other member.. (I assume I'd need the other persons SSN and I don't want to tell anyone why I need their SSN)

Also, I've deduced from your post that an LLC pays taxes once, unlike a C corporation, correct? (i.e, once on company earnings and once on individual earnings)..

The LLC does not pay taxes. The amounts paid to the individuals is taxed on your personal tax return. Your tax guy can make sure it is set up this way.

You would have to ask him about not having another member. I should THINK it would be ok, because you could start out solo but have the intention to ADD other members. But I am not sure about that.

[dallis]

PP doesn't check the name.

They just verify that the number is 'valid'.

The name is only an issue if you go over both the 200? transactions AND $20K limit.

As long as it's below that threshold, they don't know the names don't match because they don't report to the tax authorities.

If it goes over that total they try to send the government a 1099 and it will bounce back with a mismatched name.

[pennslmmer]

I went to my CPA a few days ago with the same question of opening an LLC with multi members. He advised that I don't do it. He said that the problem with this method is when it comes to providing incomes/taxes, they will still need each individual SSN. Anyone care to clarify this? Thanks

[phaz0rz]

Originally Posted by pennslmmer

I went to my CPA a few days ago with the same question of opening an LLC with multi members. He advised that I don't do it. He said that the problem with this method is when it comes to providing incomes/taxes, they will still need each individual SSN. Anyone care to clarify this? Thanks

FWIW this is why I've stuck to single member LLC's, despite the benefits of multi-member. To go the single-member route you just need to get creative when upgrading your Paypal account, so that P/P doesn't insist on getting the SSN of the single member/sole proprietor.

You can always do a multi-member LLC though. When you form it, say 99% of the profits will go to you (so they'll go on your tax return), and the other 1% will go to a close family member (which of course will need to be shown on said person's tax returns). I'm not an expert but that's the simplest setup I can think of.

Rule of thumb - If you choose to setup a multi-member LLC, a share of the LLC's profits should be reported on at least two tax returns. I wouldn't think you're allowed to call yourself a multi-member LLC and have all the profits reported on a single tax return.