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so what exactly is an ein anyway i'm sure you've heard it before and it probably sounds like one more thing that business owners need to deal with did for me let's change that in this video i'm going to show you what an ein is what the benefits of an ein are who needs an ein how to get an ein how much it costs and what to do after you get one let's go so let's talk about what an ein is you might be wondering what that nine digit number is with a hyphen in between the first two numbers that is your employer identification number also known as your ein an ein or an employee id number is your federal tax id for your business think of it like a social security number for your business you have a social security number as a person your business also needs a social security number however it's not called a social security number when it comes to a business it's called an ein eins typically look like this sometimes an ein is also referred to as a tin which stands for taxpayer identification number sometimes it will be referred to as an fein which stands for federal employer identification number and sometimes it even stands for ftin which is federal tax identification number think of an ein as a social security number for your business every business needs one every person needs a social security number every business needs a social security number so if you have multiple llc's each llc needs its own ein let's talk about the benefits of an ein and why you would need one your business needs an ein to do the following to file taxes open a bank account build credit apply for a reseller's permit apply for a wholesaler's permit apply for business license to get credit card processing to get amazon reselling set up to get bank loans to prove that your business is real there's so many things that you need an ein for that it's almost it's mandatory that you get one right away but we're going to talk about that in a minute getting an ein isn't a requirement for every single business but even if it isn't requirement it's still a really good idea so let's talk about who needs an ein the irs says that you need your own ein if you can answer yes to any of the following questions do you have employees do you operate your business as a corporation or a partnership let me just throw this out there for you if you go into business with somebody informally say for example you have someone buy a car and you do the fixing up and the selling but they put up the money and buy the car and you guys split the profits that's a partnership so if you guys are doing that together the government says that you need an ein throwing it out there third question do you file any of these tax returns employment excise alcohol tobacco or firearms most of us file employment tax returns therefore most of us are going to need an ein question number four do you withhold taxes on income other than wages paid to a non-resident alien for most people this is going to be no however if that's you you need to get an ein do you have a co-plan kyo kiyoff kyo plan i don't really know how to say it but i do know what that is a kill plan or a kiosk plan however you say it very similar to a sep ira or a self-employed retirement account so question number six asks if you're involved with any of the following organizations trusts accept the individual granter owned revocable trusts iras exempt organization businesses income tax returns estates real estate mortgage investment conduits non-profit organizations farmers and cooperatives plan administrators so if you're involved in any of these organizations you need to get an ein bottom line let me make it really really simple for you guys if you're going to start a business or you're thinking about doing a side hustle anything at all get an ein even if you're just a sole proprietor you can get an ein with your social security number and do business as a business so here's how you get an ein number before you apply for an ein you want to first establish your business with the state this means that you need to form an llc first then apply for your ein so we're going to assume that you've already gone on to your secretary of state website you've already filed your articles of organization which is what you need in order to form an llc you've taken a note of when you formed that company and now we're gonna go get our ein side note you can get an ein at any time during the process you don't have to have an llc first however it's best that you do have an llc first because you do not want to tie an ein to a name that is not available so i recommend that you first file for your llc with the secretary of state and then go apply for your ein number once you're certain that you can have the name that you really want ein comes second so let's say that you're at that point you're ready to get an ein let's get into it we need to make sure that we go to the irs website and follow the steps in order there's a lot of websites out there that will do the exact same thing for you but they're going to charge you money so if you have to pull out your credit card or your checkbook at any time during this process you are on the wrong website eins are completely free let's start the application so in case you want to follow along with my blog it matches up with this video you can find it on my website that's my website right there click on the link in the description or just hit the description and follow along and read along with us we're going to get your ein right now so this is what the website should look like pretty standard government website let's figure out what we need to do so we determined our eligibility we've already talked about who needs an ein and we've understood that we need one we need to know that we have to do the online application session will time out after 15 minutes so make sure that you get it all done then we need to submit our application so if there's anything that you still don't understand about eins you can click on any of these publications and read further but i promise i covered the meat and potatoes for you let's click on apply now and see what happens all right now we're at the next page this is where we begin the application within the ein assistant begin application so here's where we choose our identity most people are going to pick sole proprietor or limited liability company i'm a big fan of limited liability company i rarely would do anything else because these llc's have so many benefits not to mention you can get them taxed like a corporation if you want to so we're going to choose llc if you don't have a company set up and you want to form an ein as a sole proprietor you would choose this option let's go with llc today the next screen talks a little bit about llc's and the requirements for llc's just know that if you set it up correctly you're good okay so this is where you say how many members are in the llc typically it's going to be one i highly recommend it b1 manager managed llcs are the most secure and then we choose the territory where the llc exists we're just going to go into california right here if you look at this next page it tells you that since you're a single member llc you'll initially be classified as a disregarded entity for the purposes of filing a tax return that's okay no big deal that just means that the money that your business makes is going to go directly onto your individual tax return in the form of a schedule c now if that's something that you don't want to do and you want to elect to change your status you can file any of these forms right here the government's not trying to hide this information from you they just don't make it really easy to understand let's go to the next page so here's where you're going to choose the reason that best describes why you're applying for an ein starting a new business or banking purposes are the two most common either one's gonna work just choose whatever applies to you we're gonna go next the rest of this form is really easy simply put in your name of the responsible party of the llc so if you have more than one member of the llc and say there's two people in your 50 50 choose one person to file the irs records and get the ein it's not that big of a deal it doesn't matter that much so put in the person who's going to get the ia ein under authenticate after we continue we're going to get to the addresses tab and that's where you'll put the address in of the actual llc and where it resides not where the llc is going to be doing business not where you live but where the llc resides the state that the llc has formed in okay where is the llc physically located very important let's type in the address where 123 main street california 91709 phone number put your phone number in is your address in from above no hit continue okay this is the important part when you get to details they're going to ask you to tell them about the llc you want to put in the legal name of the llc and it has to match the articles of organization so you've already filed your paperwork to become an llc right so you need to make sure that you use the exact same name you want to tie this ein to that llc so when you're typing in the name let's say it's joe's barber you're going to type it in just like this you do not want to put the llc at the end ltd llp any of that we don't need simply joe's barber now if you're doing business with a different name you're going to put in your trade name or your gba which you want to do business as here you're going to put in the county where the llc is located here you're going to put in the state that the llc is located in and the state where the articles of organization are filed notice how there's two boxes here typically those two answers are different and then lastly we're going to put in the llc start date so this is the day that you formed and filed your articles of organization once you've completed this whole form you're done and you're about to get your ein so now that you have your ein you can do a couple things and one of the things that i recommend you do right away is you take that ein you take your articles of organization from the llc that you formed and you go open up a business bank account that is the most important thing you can do for your business you really really want to stress keeping your personal assets and your business assets completely separate we do not want to commingle funds it's bad business so let's set a good foundation for our business open up a separate bank account make sure llc is formed properly get that ein and now we have a foundation that we can springboard off of and really grow this business once you have your foundation set up and you have your business money and your personal money separate then we can start moving on to the other things like putting together an operating agreement which states how your business runs on a day-to-day basis just remember you got this if i can do it you can do it let's take this one step at a time keep asking questions educate yourself and be good to future you be sure to follow me on my other channels for more content like this and if you got any value out of this video do me a favor and hit the like button so we can tell the youtube algorithm there's good thoughts in here maybe somebody else needs to know how to get an ein thanks for watching i hope you learned something be good to future you and i'll catch you on the next one this is gonna be a fun