Does an LLC need an EIN?
Does a DBA need an EIN?
Does a DBA need an EIN? Learn the essential facts about DBAs and EINs here.
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Whether you’re signing up for your first DBA or you’re just thinking of getting one, you probably have lots of questions. One might be, “Do I need an EIN for DBAs?” We can help answer that question. In this guide, we’ll discuss the difference between EINs and DBAs, when you would use them, and more.
What is an EIN?
An EIN, or employer identification number, is a taxpayer ID number for a business. In a sense, EINs are a lot like Social Security numbers, but they’re assigned to businesses instead of individuals. They’re formatted as nine-digit codes that the IRS uses to identify a business on tax forms.
Below we’ll cover what business structures are required to get employer identification numbers. Any business structure that needs (or wants) an EIN can get one for free. The IRS offers online applications, or you can file Form SS-4 by mail or fax to submit a paper form.
What is a DBA?
A DBA, or “doing business as” name, is a bit like a nickname for a business. It’s a registered name that allows you to conduct business under a name that’s different from your legal name. In some states, a DBA is called a trade name, assumed name, or fictitious business name.
State statutes for DBAs vary a lot. Some states don’t require DBA registration, or they handle it at the county level. In a few states, DBAs are protected for exclusive use (but in most, multiple people can use the same DBA). Some jurisdictions require annual renewal for DBAs, and in others DBAs last for years or even perpetually.
If you decide to get one, be sure to consult your state statutes to check that you’re aware of the DBA filing requirements in your area. For example, in Alaska, a business should add a DBA to its business license by filing a Name Change form instead of a dedicated DBA form.
Even if your state doesn’t make DBAs exclusive, registering one might deter other businesses from using your chosen name.
Do I need an EIN for a DBA?
A DBA is simply a business nickname you’re allowed to use instead of your legal name; it doesn’t have any effect on the legal status of the business. For example, it doesn’t turn a sole proprietorship into a registered business. So if your business doesn’t need an EIN by default, then you won’t need to get an EIN simply for registering a DBA.
However, you will need to get an EIN if your business meets one of the following criteria:
- Is a type of business entity such as a corporation, partnership (including a limited partnership, general partnership, and limited liability partnership), or multi-member LLC
- Has one or more employees
- Owes excise taxes
- Has a Keogh plan
- Is a trust, estate, real-estate investment conduit, nonprofit organization, farmers’ cooperative, or plan administrator
Single-member LLCs and sole proprietors might not be required to get an EIN if they don’t have employees, but many do anyway. That’s especially true because most banks ask to see an EIN before they’ll issue a business bank account. As a result, it’s pretty common for a business to have both an EIN and a DBA. But having a DBA doesn’t necessitate getting an EIN. They’re two unique registrations.
We can help!
Even if you’re starting as a solo endeavor, you don’t have to do everything alone. Here at ZenBusiness, we love partnering with small business owners to tackle the tedious “red tape” parts of business. So whether you need help getting your first EIN, filing a DBA application, or even starting a brand-new LLC, we can help. We’ll handle the paperwork so you can focus on what matters: your business.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Does a DBA need an EIN? – FAQs
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This question is actually a bit misleading because technically, a DBA can’t own anything. It’s not a legal entity type. Instead, a DBA is owned by a person or business. Likewise, an EIN is held by a person or business. So the same person who owns a limited liability company with a specific EIN could have a DBA.
In a similar vein, let’s say that a business owner starts out as a sole proprietorship with a DBA, and they get an EIN because they have employees. Later, they decide to upgrade and become an LLC. They will likely need to get a new EIN because the legal structure of their business has changed.
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This is a common question business owners ask. Since businesses with employees must have an EIN, you’ll need one if you hire extra help. But even if your business isn’t legally required to get an EIN, you can choose to get one if you want. Many sole proprietors opt to get one for privacy reasons. If a sole proprietorship has an EIN, they can list that federal tax ID number on some of their forms instead of their Social Security number.
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The crucial piece of identifying information that a business uses for taxes is its tax identification number (Social Security number or EIN). They also use their business’s legal name. As a result, a DBA — which is nothing more than a nickname — is not used for filing tax returns.
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Filing for an employer identification number is relatively simple, and the federal government handles the registration. You can file online with the IRS’s web portal, or you can download Form SS-4 and fill it out to file by mail or fax. No matter how you file, there is no filing fee.
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Excise taxes are a type of business tax that’s levied on the sale of certain goods or services, especially on the federal level. For example, sales of alcohol, tobacco, fuel, and airline tickets are all subject to excise tax. Like a sales tax, businesses can add excise taxes onto the ticket price they charge to reduce the financial burden of the tax.
If your business owes excise taxes, you’ll need to get an EIN.
EIN Resources
DBA Resources
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