Whenever you work for someone as an employee or as a contractor working under your own name, you have to use your social security number for tax purposes. In some cases it is unavoidable, but whenever you can avoid it you should. This is one such case. Hopefully, your new game company will be hired to do some work and you’ll make some money. When this happens, you’ll have to pay taxes, and as a result you’ll need to use a form of identification with the IRS. This is called an Employer ID Number, or EIN for short. I’ve listed the steps below, but please be sure to read every page as you go along in the process instead of just blindly following them. You’re here to learn too, and plus my instructions below do not qualify as legal or business advice.
STEP 1: Go to https://sa2.www4.irs.gov/modiein/individual/index.jsp.
STEP 2: Click “Begin Application >>”.
STEP 3: Since you are applying for an EIN with your LLC, select the “Limited Liability Corporation (LLC)” option and press “Continue >>”.
STEP 4: Read the next page and press “Continue >>”.
STEP 5: Enter the number of members in the LLC (this will be 1 if it’s just you) and choose the state you are in (this will probably be Georgia if you are following my tutorial, but pick whatever state you filed your corporation in). Then press “Continue >>”.
STEP 6: Read the next page, then press “Continue >>”.
STEP 7: Select the “Started a new business” option from the next page, then press “Continue >>”.
STEP 8: You should now be on the AUTHENTICATE portion of the process (there is a dark blue bar labeled “Your Progress” above the page content at all parts) and you should see a check mark next to IDENTIFY. Select “Individual” as the responsible party of the LLC, and press “Continue”.
STEP 9: Type in your name and SS# in the next page, then choose the option below that section labeled “I am one of the owners, members, or the managing member of this LLC.” Then press “Continue >>”.
STEP 10: You should now be in the ADDRESSES portion of the process. Type your address and phone number into the next page, then press “Continue >>”.
STEP 11: You should now be in the DETAILS portion of the process. Type in the exact name of your LLC, including the word “LLC” at the end of it. I typed “Fruitstrike Games LLC”. The county should have been automatically filled in for you, but in case it wasn’t, type it in all caps. Enter your state into both of the state sections (I put Georgia here obviously). Finally, enter the month and year that your LLC was created. I put December 2009. Then press “Continue >>”.
STEP 12: The next page has a bunch of questions about your business, but if you are making a game company you should be answering “No” to all of them. Unless maybe you are making a game about gambling/wagering, then you should probably stop following my tutorial and seek legal counsel. … But if you feel confident that gambling/wagering is not part of your project, like I do, then you can say “No” to all of them and press “Continue >>”. I also had to read about Form 720 just in case, but after going through that huge list I saw nothing that remotely applied to my game business.
STEP 13: It asks you to select what category your business belongs in on the next page, but none of them really applied to a game company, or even software in general. So select “Other” at the bottom and press “Continue >>”.
STEP 14: Since you are making games, you are doing either Consulting or Service. The key is that the next page asks you to select the one that BEST describes your business activity. Since I am making games under my company’s name, I am providing a Service. If I were recommending people or giving advice or guidance, which may very well be the case if you are doing game design for someone with no tangible product, I would be Consulting. You can feel free to choose either, but I am guessing 98% of the time since you are building your own business you are probably going to be building games and selling them, so you should be selecting Service. That applies to me too, so I selected “Service” from the options, and then hit “Continue >>”.
STEP 15: The next page asks you to input into the text field what primary service you are providing. I entered “Game Software” (which should also be applicable to you) and pressed “Continue >>”.
STEP 16: You should be on the final portion of your progress now, EIN CONFIRMATION. You can obviously choose either option at this point, but since I live in my computer I selected to receive my letter online. Whichever you choose, press “Continue >>”.
STEP 17: Read the final page, then press “Submit”. Voila! You’re done!
See? That wasn’t so hard. Now you have an EIN for your business and you’ll be able to do the next step in the process – getting a bank account for your business. You have to have a bank account in order to receive money as the business, and to get one you need the EIN.
One last special note, your EIN isn’t effective with the IRS for up to 2 weeks after you apply. It’s official as soon as you receive your confirmation letter, but it might not be in their electronic systems immediately. You can get a bank account, but you can’t file taxes online, etc, using it just yet. Therefore, if you plan on filing taxes online with your EIN for your business, make sure you do it at least a month in advance of tax month.