Use may use your Social Security Number as your sole proprietorship’s identifying number, unless:
- You must withhold taxes from a subcontractor you've hired.
- You hire one or more employees.
- You set up a self-employed retirement plan (does not include a SEP).
- You are an LLC
- You deal in products that require you to file a Federal excise, or alcohol, tobacco and firearms return.
If one or more of the above applies to your business, you will need to get a nine-digit employer identification number (EIN). An employer identification number, as with many IRS terms, is incorrectly named. All employers must have an EIN but, as you can see from the list above, it's not only employers who must have one.In the United States everyone must have a Social Security number. Hospitals give them out when a child is born. Think of an EIN as a Social Security number for a business.
Many of you have asked whether you need to get an EIN. Here's a cheat sheet to guide you. The links take you to the EIN application process.
You will need an EIN if you answer "yes" to any of the following questions. If you answer "yes" go here to learn How to apply for an EIN or click the YES .
Do you have employees? YES NO
Do you operate your business as a corporation or a partnership? YES NO
Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms? YES NO
Do you withhold taxes on income, other than wages, paid to a non-resident alien? YES NO
Do you have a self-employed pension plan other than a SEP? YES NO
Are you involved with any of the following types of organizations? Trusts, Exempt Organizations, Estates, Farmers' cooperatives? If yes. talk with a tax pro.
Note that the IRS now requires an LLC operating as a sole proprietorship to have an EIN.
Here's a couple questions on EIN from my readers.
Hi June! (it's my mother's name, too!)
I am an Actor-Filmmaker living in New York City and have been an indie for 8 years. I am getting married in September and I will be taking my husband's last name. However, I would like to keep my maiden name so I can keep my stage name, accept checks, sign contracts, etc. I am thinking of filing a DBA form. Is that the right move? If I do, do I need a Tax Identification Number from the IRS (this was an option for an additional fee on LegalZoom.com and I'm not sure I need it)? I guess I'm also confused how to use the DBA with my bank account and keeping tax records.
Any advice for a struggling artist?
Thank you so much for supporting us indies! Your support means a lot! I look forward to hearing from you.
All the best,
I have many clients who use a maiden name as well as a married name or a hyphenated name with both. Some guys use both a birth name and a stage name. No DBA is required.
Check with your banks and see what they require.
It's a legal situation so best to check with a lawyer, however, I suggest signing contracts with both names.
No you do not need an EIN to use both names.
Happy September wedding!
I went on Amazon.com to find a book to help me with taxes. I saw your book, and plan on getting it. However, I have a few questions that may not be in your book, because they have to do with my occupation and a Fictitious Name. I'm thinking of doing graphic/website design here in Florida, generating work from an office in my home. I would perhaps have clients in various parts of Florida and perhaps out of state, via the Internet. The business would be just me; no employees.
Someone suggested that I use my social security number for tax purposes, rather than get an EIN number. And, I'd rather have a Fictitious name, other than mine, appear on my business cards, letterhead, and such.
Is it possible to work as a graphic/website designer without the need of an EIN number, and have a fictitious name?
I look forward to reading your book, since the reviews are all positive.
The feds do not require you to have an EIN for a fictitious name. However, since you will have checks made out to you in your business name, your bank may require it .