Will my LLC still be issued a tax-ID number if I choose to be taxed as "disregarded as a separate entity"???

Question

I obviously will need a federal tax ID number to open bank accounts and whatnot for my LLC. However, if I choose the option to be taxed as "disregarded as an entity separate from its members", will I still receive a federal tax ID? My LLC is, after all, not being taxed itself (taxation is passing through to me).

Thanks for your help!

Answer 1

Yes, you should still get a separate tax ID number for the LLC. I can only assume the primary reason for the LLC is to try and provide some liablility protection. In order to prevent someone from "piercing the corporate veil" , in other words, having the court find that the corporate form of business was really a sham and should be disregarded, you should make EVERY effort to establish the LLC as a true, separate entity from yourself.

For tax purposes, filing a schedule C with your 1040 to report all the LLC business is fine. Look at the schedule C. There is a line where you enter the tax ID of the business, independent of your social security number.

By the way, the IRS does not simply send you a tax ID number if you register the LLC with the state. To get a tax ID, you must apply to the IRS. You can do this over the phone or in writing.