Sole-Proprietors,Prevent,Ident DIY Sole-Proprietors, Prevent Identity Theft by Getting an EIN
When starting a new work at home business it is very easy to become consumed by it. We spend so much time trying to get the business up and running that we may end up becoming burned out and lose our motivation. There is so much to learn and Normal 0 false false false MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable{mso-style-name:"Table Normal";mso-tstyle-rowband-size:0;mso-tstyle-colband-size:0;mso-style-noshow:yes;mso-style-parent:"";mso-padding-alt:0in
From time to time, you'll be asked to provide your social security number or employer ID to clients or governmental agencies. Once you do that you have no control over which client employees and others can view your number.With identity theft an ever increasing problem, reducing the need to give out your social security numer can only be a good idea.The best way to do that is to have an employer identification number.In fact, having an EIN is mandatory for almost any business that is set up as something other than a sole-proprietorship.This is the IRS checklist for businesses that are required to have an Employer Identification Number.You have employees.You are set up as a corporation or partnership.You file tax returns for Employment, Excise, or Alcohol Tobacco and Firearms.You withhold taxes on income, other than wages, paid to a non-resident alien.You have a Keogh plan.You are involved in a trust. (There are some exceptions, check the IRS site).You are involved in one of the following types of organizations: Estates, real estate mortgage conduits, non-profits, farmer's cooperatives, and plan administrators.Sole-proprietors are not required to have an EIN. But if you are a sole-proprietor, I strongly recommend getting one.The reason? If you are a sole-proprietor, clients who pay you $600 or more in the course of a year must file a 1099 on your behalf. And they need your social security number or employer identification number to do that.And you, in turn, are required to do the same for your own sole-proprietor subcontractors who receive $600 or more in payments from you.The Employer's ID number fulfills IRS's requirements when filing your 1099s, so you just substitute the EIN for the social security number.The process is easy and straightforward.You can apply for your EIN number online at the IRS website (www.irs.gov) or ask the IRS to have the forms sent to you. Article Tags: Social Security Number, Employer Identification Number, Identity Theft, Social Security, Security Number, Employer Identification, Identification Number
Sole-Proprietors,Prevent,Ident