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Posted

I want to setup an individual 401K for my wife at TD Ameritrade. My wife has a single member LLC for her business. She uses her own SSN on all forms including W-9 forms. The TD 401K application forms require you to specify an EIN, employer name, and type of business.

Should we fill out the application as an LLC or a Sole Proprietorship? I know the IRS sees this LLC as a disregarded entity as treats my wife as a sole proprietor. My main question is what type of EIN to obtain and use (Sole Proprietorship vs LLC)? I have read the IRS forms which state the LLC EIN really shouldn't be used except for a few specific cases like excise taxes.

Sole Proprietorship
EIN: Sole Proprietor EIN
Employer Name: Wife's Name
Type of Business: Sole Proprietorship

LLC
EIN: LLC EIN
Employer Name: LLC Name
Type of Business: LLC

Thank you

Posted

There are IRS instructions somewhere, I don't remember where, that say you must have a separate EIN for a business if you sponsor a retirement plan. The LLC is disregarded for tax purposes but that's the entity that is operating the business and sponsoring the plan, so I'd get a tax id for that entity.

Ed Snyder

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