EIN<\/a>; you can just use your own SSN, especially if there are no employees in the view of your works. However, whenever you hire, open a bank account, or hit any trigger specified by the IRS, it becomes necessary to get an EIN.<\/p>\n <\/p>\n
The Purpose of an EIN for Sole Proprietors<\/h2>\n
The only function of the Employer Identification Number<\/span><\/span>\u00a0<\/span>is to help the IRS track your business activity apart from your personal matters. If it is not necessary for you to file any of the said forms, such as for employees or an employment status or requirement for taxes such as Form 941 or highway use tax Form 2290, sole owners do not need to have an EIN. The Employer Identification Number <\/span><\/span>allows for one more means of not-the-revelation-of-SSN; instead of giving it out to customers or vendors, you can just mention your EIN to them. The IRS uses this Employer Identification Number <\/span><\/span>as an identifier for processing returns with Schedule C (Profit or Loss from Business) in conjunction with Form 1040 as well as a free way of giving some credibility to your business, whether it be for bank or loan applications.<\/p>\n <\/p>\n
How Does an EIN Work for Sole Proprietors?<\/h2>\n
Getting and using an EIN as a sole proprietor is straightforward:<\/p>\n
\n- Do You Need One?: You\u2019re required to get an Employer Identification Number<\/span><\/span>\u00a0<\/span>if you hire employees, file excise tax returns (e.g., Form 720), have a Keogh or solo 401(k) plan, buy an existing business, or file for bankruptcy. Otherwise, your SSN works fine\u2014though many sole proprietors grab an EIN anyway for privacy or banking perks.<\/li>\n
- How to Apply: Apply online at irs.gov (Monday\u2013Friday, 7 a.m.\u201310 p.m. ET) for instant approval\u2014free and fast. You\u2019ll need your SSN, ITIN, or existing EIN as the \u201cresponsible party\u201d (that\u2019s you). Or go old-school with Form SS-4 via mail (four weeks) or fax (three days). International sole proprietors call 267-941-1099 (not toll-free).<\/li>\n
- Using It: Once you\u2019ve got your EIN, slap it on tax forms (e.g., Form 940 for FUTA tax), business bank accounts, or state licenses. Only one EIN per sole proprietorship\u2014don\u2019t get a new one for each trade name (DBA). If you incorporate or add a partner later, though, you\u2019ll need a fresh EIN.<\/li>\n<\/ul>\n
The IRS issues one EIN per responsible party per day, and you can\u2019t save an online application mid-session\u2014it times out after 15 minutes.<\/p>\n
<\/p>\n
Key Details for EIN and Sole Proprietors<\/h2>\n\n- Responsible Party: That\u2019s you\u2014the sole proprietor. The IRS needs your SSN, ITIN, or EIN to tie the business to you. No entities can be the responsible party unless it\u2019s a government outfit.<\/li>\n
- When You Don\u2019t Need It: No employees? No excise taxes? No retirement plans? Stick with your SSN for Schedule C and Form 1040.<\/li>\n
- Changes: Change your business name or address? Update the IRS with Form 8822-B within 60 days\u2014no new EIN needed. But if you switch to an LLC, corporation, or partnership, apply for a new one.<\/li>\n
- Lost It?: Can\u2019t find your Employer Identification Number<\/span><\/span>? Check old tax returns or call the IRS Business & Specialty Tax Line at 800-829-4933 (7 a.m.\u20137 p.m. local time).<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"
What is an EIN for Sole Proprietors? An EIN, or Employer Identification Number, is the number given by the IRS for administering tax purposes. It is a nine-digit number (i.e., 12-3456789) which is assigned to all types of business entities, including sole proprietorships. It is like a SSN for your business. The sole proprietor\u2014someone working […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-896","post","type-post","status-publish","format-standard","hentry","category-e"],"yoast_head":"\n
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