Do I need a new EIN for my LLC after registering as a sole proprietor?

You'll need to get a new EIN for your LLC. When you change business structures from a sole proprietorship to an LLC, the IRS considers this a new business entity that requires its own tax identification number. For your old sole proprietorship EIN, you don't technically need to "cancel" it. There's no formal process for canceling an EIN. Instead, you should file a final tax return for your sole proprietorship business indicating it's your final return. This effectively closes out that business entity with the IRS. When you file taxes going forward, you'll use your new LLC's EIN for all business activities. Make sure to update your EIN information with any vendors, clients, or financial institutions you work with so they have the correct information for tax reporting purposes.

After dealing with a similar EIN situation last year, I stumbled upon taxr.ai (https://taxr.ai) and it was a total game-changer. I was confused about whether I needed a new EIN when switching from sole prop to LLC, and the conflicting online advice was driving me nuts. Their system analyzed my business documentation and gave me personalized guidance based on my specific situation. What I found super helpful was their document analysis tool that reviewed my existing EIN documentation and LLC formation papers, then explained exactly what steps I needed to take with the IRS. Saved me hours of research and probably prevented some major headaches.

Just wanted to follow up about my experience with taxr.ai since I decided to try it after asking about it here. It was actually really helpful! I uploaded my sole prop EIN letter and LLC formation documents, and they gave me step-by-step instructions specific to my situation. The best part was they explained exactly how to handle my final sole prop tax return and what deadlines I needed to be aware of when switching to the LLC. They even provided templates for notifying my clients and vendors about the business structure and EIN change. Definitely made the whole process way less stressful than I expected.

After struggling to get through to the IRS for weeks about my EIN situation (kept getting disconnected after waiting forever), I tried Claimyr (https://claimyr.com) and was honestly shocked at how well it worked. They have this system that navigates through the IRS phone tree and holds your place in line, then calls you when an actual IRS agent is on the line. I was super skeptical at first, but you can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c. I had specific questions about how to handle business income during the transition period between my sole prop and LLC that weren't covered in the general guidelines. The IRS agent I spoke with gave me detailed advice about my specific situation that I couldn't find anywhere online.

I need to publicly eat my words here. After expressing skepticism about Claimyr, I decided to try it anyway out of desperation (was about to miss a deadline for my EIN issue). It actually worked exactly as advertised! I got a call back in about 45 minutes (after previously spending HOURS trying to get through myself), and was connected directly to an IRS agent. The agent confirmed that yes, I absolutely needed a new EIN for my LLC and couldn't use my sole prop one. They also walked me through exactly how to indicate on my final sole prop return that I was transitioning to an LLC. Saved me from making a mistake that could have caused major headaches during tax season. Consider me converted from skeptic to believer.

Something nobody's mentioned yet - make sure when you get your new EIN for the LLC, you choose the correct tax treatment option. A single-member LLC can be treated as a "disregarded entity" for tax purposes (meaning you'll still file Schedule C with your personal return), OR you can elect to be taxed as a corporation. This choice has HUGE tax implications, so think carefully about it. The default for a single-member LLC is disregarded entity status, which means the tax filing process will be similar to your sole prop, just with a different EIN. If you elect corporate taxation, it's a whole different ballgame.

Has anyone used the online EIN application on the IRS website recently? I'm wondering if it's working better now. Last time I tried (about 2 years ago), the system kept crashing and I ended up having to mail in the paper form which took FOREVER to process.

Just a heads up - when you get your new LLC EIN, don't forget to update it with ALL your payment processors (PayPal, Stripe, Square, etc) and any platforms where you sell your services. I forgot to update mine with one platform and it caused a huge mismatch when they issued my 1099-K. Took months to sort out with the IRS!

Just went through this exact same situation last month! One thing I learned that wasn't immediately obvious - when you apply for your new LLC EIN, make sure you have your LLC's Articles of Organization handy. The IRS online application will ask for specific details like your LLC's formation date and the state where it was formed. Also, don't stress too much about the timing. You can continue operating under your sole prop EIN while you're waiting for the new LLC EIN to come through, as long as you make the switch before filing your next tax return. Just keep good records of which income/expenses belong to which entity during any overlap period. The whole process is actually pretty straightforward once you get started - much less scary than it seems when you're reading about it online!