Saving Without A Budget

Saving Lots of Money Is Easy. I'll Show You How.

  • Home
  • About
  • Contact

Oct 14 2017

When Is A Sole Proprietor/Individual Tax ID Needed?

Share
Tweet

Think of the things that your social security number (SSN) has allowed you to do.  Without it, you could not have opened your bank account.  You need your SSN to register for a passport or driver’s license.  You need it so that your employer can pay taxes for you as an employee.  Your SSN is a Federal Tax ID number for individuals.  It lets you as an individual engage in official transactions, such as employment and paying taxes.  What happens, though, if you are self-employed or own your own business?  In that case, your SSN is not enough.  You need a sole proprietor Tax ID number.

A Sole Proprietor Tax ID Number Is Not Just for Businesses

The IRS issues employer ID numbers (EIN) for businesses and other entities that do not meet the common definition of “business.”  You do need a sole proprietor EIN if you are the sole owner of a small business that is not registered under a different entity type.  (Your other choices are corporation, S-corporation, and LLC.)  A business registered as a sole proprietorship may or may not have other employees besides the sole proprietor.

Another reason to register as a sole proprietor is if you are an independent contractor.  If you make all of your income from jobs that issue you a 1099 (not a W2), you will pay much lower taxes if you get a sole proprietor EIN.  Likewise, if you employ a babysitter or housekeeper, you will need to get a sole proprietor EIN.

How to Get a Sole Proprietor Tax ID Number

You can apply online for an EIN for your sole proprietorship.  As soon as you submit the EIN application, the IRS EIN website will send you an email including your EIN.  Then you can immediately get started with your business.

Written by Justin Weinger · Categorized: Miscellaneous

Categories

  • Around The House (39)
  • Automobile (7)
  • Bargain Hunting (32)
  • Book Reviews (5)
  • Budget Template (4)
  • Cleaning (3)
  • Clothes (4)
  • Credit (2)
  • Debt (27)
  • Economy (25)
  • Entertainment (21)
  • Extreme Couponing (7)
  • Food / Drinks (12)
  • Free Stuff (16)
  • Frugal Living (38)
  • Health / Beauty (7)
  • Home Ownership (7)
  • Identity Theft (4)
  • Inflation (3)
  • Insurance (4)
  • Investing (40)
  • Keeping Up With The Jones (16)
  • Live Below Your Means (23)
  • Making Extra Money (10)
  • Miscellaneous (67)
  • Money Movies (4)
  • Money Myths (6)
  • Mortgage Default (4)
  • Needs and Wants (14)
  • News (33)
  • Personal Finance (32)
  • Pets (4)
  • Politics (6)
  • Retirement (22)
  • Sales (7)
  • Ten Pillars of Financial Success (1)
  • Tough Love Financial Lessons (2)
  • Traveling (2)
  • Utilities (7)
  • Vices (20)
  • Wealth (15)
  • What To Do With Your Money (59)

Recent Comments

  • Going Out to Eat On a Budget | American Debt Project on The Best Sites for Extreme Couponing
  • Carnival of Money Pros on Common Money Mistakes
  • Carnival of MoneyPros - Raking Leaves Edition - Penny Thots on Common Money Mistakes
  • Money Saving Apps That Will Actually SAVE You Money on The Best Sites for Extreme Couponing
  • How to get money back, automatically, after you’ve made a purchase | American Debt Project on The Best Sites for Extreme Couponing

Disclaimer

Disclaimer: All information provided at Saving Without A Budget is for informational purposes only. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise
  • Home
  • About
  • Contact

Copyright © 2021 · Altitude Pro Theme on Genesis Framework · WordPress · Log in