llc

[TAX]

I just got a client who is going to open medcial Lab.

He is structured as LLC. Single member LLC. He will have 5 employee and one contractor.

When he filled out SS4 - IRS has given him two fed id: One for LLC and one for Employees

Single member LLC is disregarded entity for tax purposes. I will fill out SCH "C" and no tax return for LLC. Also for payroll use second fed ID. Does this sound right?

Any thing else I need to do?

Thanks!

[taxmandan]

EIC duplicates

When he filled out SS4 - IRS has given him two fed id: One for LLC and one for Employees

Huh? The employees work for the LLC so that is the EIC used for payroll. Sounds like theIRS has once again goofed by issuing two EINs to the same entity. There needs to be only one EIC for this entity. Use the one for the LLC and disregard the other one. EIN then goes on the Sch C for the business.

[Safire]

They always do that.

According to my dealings with single member LLCs, the IRS always issues 2 numbers. They told me that the one number was not to be used on any forms, that it just identified him as the "single member".

Use the number issued to the LLC on all forms, payroll and Schedule C. Put the other one in the file for reference. Doesn't make any sense to me, but that's what they said to do.

[Black Bart]

Safire's right.

I applied for an EIN for a client's new single-member LLC last year and they sent her two numbers. I agree with both taxmandan and Safire--it seems like they are making a mistake and that it doesn't make any sense. I still feel like that, but that's the way they do it. I would have written or called IRS back about it, but when we applied by phone, they said we'd get two numbers and to use the LLC number only and just file the individual's number away.

She got two of those letters--the ones that say "We Assigned You An Employer Identification Number." The name and address on the individual's is like this:

JANE DOE
111 MAIN ST
ANYTOWN AR 72***

It reads like this on the LLC's:

ACME WIDGETS LLC
DOE JANE SNGL MBR
111 MAIN ST
ANYTOWN AR 72***

Also, the LLC letter states that "...you must file the following forms by the date shown next to it. -- Form 941 -- Form 940." The individual letter does not say that.

It sounds kind of like something that they IRS may be doing to keep their computer records straight--I asked the IRS clerks and they didn't have a clue why it was done that way. They said the individual number is never used unless the taxpayer goes into another non-LLC business.