Are you interested in learning about EIN or how EINs interact with your Amazon company?
This article will cover the scenarios in which you’ll need an EIN to operate your Amazon business, as well as the instances where you will not need one.
In the final section of this post, if you want to obtain one EIN for your business, I’ll outline the steps to follow to obtain one quickly.
What Is EIN?
According to the SBA, an EIN, also known as an Employer Identification Number, can be described as “a unique nine-digit code that allows you to identify your company to taxes.”
The EIN is your company’s Social Security Number.
Suppose you are an Amazon business when you are adding your business information for the first time or changing your account status to one that is business. In that case, that’s the time to tell Amazon the details of your EIN.
It is the EIN Field on the Amazon Tax Interview page.
Does An EIN Not Required To Sell Your Products On Amazon Once You Begin Working Through Your LLC?
In contrast to what you believe, you may not be required to obtain an EIN to use your Amazon account even if you intend to manage your account as a company.
Let’s examine every scenario, discover which one best matches your preferences, and take action according to the situation.
The Times When You Don’t Need An EIN To Open An Amazon Account
Since this section applies to most Amazon sellers, let’s begin with this section.
The Seller Is An Individual
This is a simple one.
Suppose you’re just beginning your journey to trading through Amazon for yourself. In that case, you may create an account, add the bank account information, and run the account using the Social Security number.
There are many advantages:
Sell more quickly
You can “test” the market on Amazon without committing more resources, such as including
It would help if you did nothing to get started because there’s already a bank account and Social Security.
The majority of Amazon sellers begin their journey through this method.
The method works for a time until sales start taking off, and the situation becomes chaotic, particularly regarding accounting.
You’re A Shareholder In An LLC, But You’re The Only Member
This is the case for numerous sellers operating as independent seller selling under personal Social Security numbers (and often their personal savings account).
Ultimately, you’ll realize that it’s the right time to take Amazon seriously and include it.
Start with an LLC and even be able to get a corporate credit card that will keep all purchases from personal spending.
If you’re aware that they exist, then you’ll be able to get an EIN.
But stop there!
What people aren’t aware of is that, in this instance, it is the case that you do not require any EIN for you to operate your company on Amazon, even if you have created an LLC.
Suppose you operate under an LLC as the sole member. In that case, your business is deemed disregarded as per the IRS.
As per the Amazon Tax Information Interview Guide, “If you are a sole-member LLC, include that proprietor’s SSN” within the Tax Identification Number field.
In short, if you’re making your application for your Tax Information Interview and you’re a single-owner LLC, you should fill out the form as if you are a single seller.
There’s no “Single Member LLC” option in the LLC classifications.
But hang on! Again!
It is possible to be taxed as an individual if you run an individual member LLC; however, this isn’t the case in all instances.
There are some instances in which you can utilize an EIN even if you’re a sole member of an LLC, and let’s take a look at those.
The Times When You Need An EIN For Your Amazon Account
Single-Member LLCs That Are A Single-Member And Have S-Corp As Well As C-Corp Elections
Remember what we said earlier? Suppose you are the LLC’s sole owner. In that case, you’re a “disregarded company,” yet you put yourself as an individual on Amazon?
You can select the method by which you want your LLC to be taxed and also change the status of your LLC to “disregarded” classification.
This process can do this—S-Corp and a C-Corp election.
According to the IRS, if you make one of these choices for your LLC, the LLC is treated like an S-Corp or C-Corp.
Thus, even if you are a sole member of your LLC, if you’ve completed either of these elections, you’ll require an EIN.
If you look at this image again, it is possible to look at the options for LLCs to choose to be taxed as C-Corp and an S-Corp.
If you’re unsure if you should take advantage of these for your LLC, discuss with your accountant the advantages to determine whether it’s worth it to your business’s specific needs.
Every state has its procedure for conducting this; a little investigation via Google and YouTube will provide you with the essential guidelines for your state.
You Are A Member Of An LLC That Has Several Members.
LLCs with more than one member who hasn’t yet finished either S-Corporation or C-Corporation choice are automatically classified as Partnerships.
For Partnerships, you’ll need an EIN.
S-Corp, C-Corp, Or Partnership Business That Is NOT An LLC
Although an LLC is regarded as S-Corp, C-Corp, or Partnership, according to the IRS, you can bypass the LLC portion and be an official S-Corp, C-Corp, or partnership.
These operate in the same way as the LLCs elected by voters in terms of being taxed. However, in Amazon, you choose the appropriate business type in your Federal Section on Taxation:
LLCs can be avoided entirely if your company is one of these alternative options.
There’s only “Other” and “Trust/estate.” However, those are rare situations most individuals will not have to deal with when running an Amazon business.
Amazon Business Questions
Do You Require Sellers’ Authorization To Sell Your Products On Amazon?
No, you don’t. If selling on Amazon, if you’re selling through Amazon, you’re operating an online business, and you are not selling anything. Federally or regulated. It’s as easy as signing up and then selling.
Do You Need To Be A Registered Company To Sell Your Products On Amazon?
You don’t have to be registered as a business to sell your products on Amazon. Amazon doesn’t require you to sign up for your business. However, it’s possible that local authorities would like you to register your online company.
Do You Require A Business License To Sell Your Products On The Internet?
So long as the product you’re selling isn’t Federally restricted, you don’t require an enterprise license to sell your products on the internet. We will discuss the items that are Federally restricted here.
How Can You Obtain The EIN For Your Company?
If you’ve realized that you wish to continue and apply for the EIN for your company, It is now simpler than ever.
Visit the IRS webpage to apply on behalf of an EIN and click the “Apply Online Now” button, then follow the steps, and they’ll give you an EIN in a few minutes.
It’s fast, and most importantly, it’s completely free.
If you take the advice here, you’ll know what you have to do when using an EIN to set up an Amazon seller account and when you don’t need it.
You’ll need to determine the best method for setting up your company, what kind of company you want to establish and how you’d like the company taxed.
Each kind has pros and cons, and it is advisable to consult an accountant or an expert to help you decide which is the most suitable for your needs.