How to Form an LLC and Get a Free EIN Yourself
The EIN is always free. The LLC filing is not. Here is the two-step way to do both without paying a middleman.
Ads promise a free LLC. The EIN part is true. Some is not. Here is the honest split, and the two steps to do both jobs yourself.
What free actually means here
The EIN is always free. The IRS says you never have to pay a fee for one. You can get it directly from the IRS in minutes, at no cost.
The LLC filing is different. The SBA's guide says each state charges a filing fee, but the amount varies by state and business structure. The state's fee still applies.
Whatever your state charges, that part is unavoidable.
Step 1: Form your LLC with the state
The IRS says to form your corporation or LLC through the secretary of state before you apply for an EIN. Do it in that order.
Why? The IRS says your EIN application may be delayed if you don't form your entity with the state first. The state comes first. The tax ID comes second.
The SBA's guide says you should apply for an EIN right after you register your business. So do not sit on it. Form the LLC, then apply.
Step 2: Apply for your EIN from the IRS
Once the state says your LLC exists, go to the IRS. The SBA's guide says you can apply and receive an EIN immediately using the IRS assistance tool. Your nine-digit federal tax ID becomes available upon verification.
You can use the online tool if you meet a few conditions. The IRS says you can use it if you are a domestic organization formed or created in the United States or U.S. territories. Your principal place of business must be in the U.S. or U.S. territories. And you must be the responsible party in control of the entity, or an authorized representative.
Can't apply online? The IRS says you can apply by phone, fax or mail if you can't.
What you need before you start
The IRS says you need the Social Security number or taxpayer ID number of the responsible party in control of your business or organization. The responsible party is the person in control of the business or organization.
One warning. The IRS says you must complete the EIN application in one session and cannot save it for later. The application expires after 15 minutes of inactivity, and you will need to start over. So gather everything first. Then sit down and finish it in one pass.
When you finish, the IRS says to print your EIN confirmation letter for your records. Do that right away. Keep it with your LLC paperwork.
How to avoid paid EIN traps
Here is the trap that catches people. Websites charge a fee to "get your EIN". The SBA's guide says do not apply for an EIN on websites that charge a fee. The EIN is free from the IRS. Paying a site for one buys you nothing.
There is a second trap. The IRS says a third-party designee must have signed authorization to apply. The SBA's guide says a third party applying for an EIN will also need signed authorization. So if you let someone apply for you, they need your signed okay first. A service that skips that step is cutting corners.
One more limit. The IRS says you can apply for only one EIN per responsible party per day. If you need two, plan for two days.
If you get an EIN notice you didn't request
Sometimes an EIN notice shows up in the mail, and you never asked for one. Do not ignore it.
The IRS recommends confirming an unexpected EIN notice was not a legitimate request made on your behalf. The SBA's guide says occasionally someone may request an EIN on your behalf for a legitimate business reason. Ask around first.
If no one did, act. The SBA's guide says if you confirm an EIN was not requested on your behalf, report it using the IRS's Business Identity Theft Affidavit. And if your EIN was stolen, follow the IRS's steps to report business identity theft.
After you get your EIN
Your EIN is your business's federal tax ID number. The SBA's guide says your Employer Identification Number is your business's federal tax ID number. You will use it a lot.
The IRS says you generally need an EIN to hire employees. You generally need one to operate a partnership or corporation. You generally need one to pay sales and excise taxes. And you generally need one to change business structures or ownership.
Day to day, the IRS says to file required tax returns and information returns using your EIN.
What if your plans change? The SBA's guide says an EIN cannot be canceled because it is an assigned, permanent federal ID number. You cannot hand it back. But the SBA's guide also says you generally need a new EIN when your business's ownership or structure changes. If that happens, the SBA's guide says you should check with the IRS to determine whether you need to change or replace your EIN.
So the plan is simple. Form the LLC with your state. Pay the state's filing fee. Then get your EIN from the IRS, where it is always free. Skip the middlemen, and keep your confirmation letter.