EIN and LLC

[Kram BergGold]

In March my client converted her Schedule C business into an LLC. We will be treating the LLC as a disregarded entity. So from past discussions about this, I will prepare only one Schedule C for 2007 covering the period Jan-Dec. I assume I should enter the LLC's EIN in item D on Schedule C (the old Schedule C business did not have an EIN). When I prepare the 1099 Forms for her independent contractors do I use her SS # or the EIN for the LLC as the payor's ID #?

[Bees Knees]

Use the new EIN for the LLC for item D on Schedule C, and for all 1099s.

[John of PA]

a second EIN

IRS may soon be requiring SMLLC's, if they have a payroll, to have a second EIN just for the payroll. But there is much confusion on this and I would cross that bridge when we come to it.

[veritas]

I would

have all schedule C owners apply for an EIN. I don't want to put their social security number on a 1099 going who knows where.

[newbie]

IRS may soon be requiring SMLLC's, if they have a payroll, to have a second EIN just for the payroll. But there is much confusion on this and I would cross that bridge when we come to it.

This still confuses me - to many numbers floating around out there, if a SMLLC has payroll what is the purpose of having one FEIN for the LLC and one FEIN for payroll?

[Bees Knees]

This still confuses me - to many numbers floating around out there, if a SMLLC has payroll what is the purpose of having one FEIN for the LLC and one FEIN for payroll?

To keep the rules complicated.

[joanmcq]

Second EIN I could see if first EIN was for ABC biz and second was for ABC, LLC.

[Kram BergGold]

Reason for 2 EIN's and LLC

The first EIN is for the LLC. The second is for the owner to be used for payroll. The IRS wants the owner to be personally liable for a disregarded entity.

[les grans]

Was there a court case?

I think that this question went to court already (several years ago) and - much surprise here! - depending on how the proprietor/LLC owner filled out the SS-4, the owner might be found liable for the PR taxes anyway...

[Bees Knees]

I think that this question went to court already (several years ago) and - much surprise here! - depending on how the proprietor/LLC owner filled out the SS-4, the owner might be found liable for the PR taxes anyway...

The single member owner of an LLC IS liable for payroll taxes, regardless of whether there is one or two EINs. I read that court case too.

Having two EINs is not needed.

I stand by my comment. The only reason to have two EINs is so that the rules can be more complicated.

[John of PA]

Excise Taxes are coming

What is on the horizon is Federal level Excise taxes on LLC's. Congress/IRS wants a separate EIN for payroll vs other Federal Reporting (Excise taxes). They are moving slowly on this, but 10 years from now we will look back and say "what happen", the LLC scene will have totally changed.