Businesses or companies established in partnership form are required by law to obtain an EIN number depending to EIN application. However, this is not required when it is a sole proprietorship. Because of that individual companies can declare their income and expenses by filling out the ‘Schedule C Tax Form’ with their social security numbers.
However, in the USA, the social security number is very private and sensitive information. For this reason, many individual companies prefer to get an EIN number against identity fraud.
Obtaining an EIN as a sole proprietorship can be a more beneficial option for you in many different scenarios. As a sole proprietorship, you can apply for retirement when you receive an EIN number. Or you can change your business structure. In this content, we would like to give information about the steps about an EIN application in private companies. But first, let’s examine why it is important to get an EIN (employer identification number).
As a Sole Proprietorship in the USA, Why Should I Get an EIN If It is Not Mandatory?
Yes, sole proprietorships can use Social Security Numbers instead of getting an EIN. But there are two good reasons to apply for an EIN number. Identity theft and fraud have become very common and dangerous today. Identity thieves get tax returns by stealing taxpayers’ social security numbers and issuing fake tax returns in a variety of ways. Therefore, EIN application for obtaining an EIN number may be a safer way to protect the privacy of your social security number.
In addition, if you do not have an EIN number, as a sole proprietorship in the United States, in many cases you are required to share your social security numbers with your customers. Otherwise, the customer has the right to block a certain percentage of the payment to be made. So getting an EIN as a sole proprietorship will allow you to run your business without having to publicly share your SSN number with your customers or anyone else.
Steps to Obtain an EIN Number for a Sole Proprietorship
According to EIN application gather the necessary information about your job. This first step includes the details you will provide to the government about your business. We can summarize this information as follows:
- Name of your sole proprietorship
- Your job title, if any
- The nature of your job and your core business
- Contact information
- Your name, social security number or ITIN Number
- Number of employees and qualifications
- Whether you intend to pay at least $1000 in employment tax each year
- Your reasons for applying for an (EIN) number
- Deadline for the income tax year of your sole proprietorship
Online EIN Application for Your Sole Proprietorship
This is the best and fastest way according to EIN application to get an EIN number for your sole proprietorship. You should share all the details we mentioned above with the online application. Along with the mandatory information, you can also easily share your digital signatures.
If you do not want to apply online, you can also apply for a sole proprietorship tax number by fax or mail. In this case, you will need to prepare your application in writing. The details you need to specify in the application are the same as the online application form.
When you fill out the application form, you can send it to the address or fax number written on the form by mail or fax. When making your application, be sure to include the address or fax number you want your application result to be sent to. Alternatively, an EIN application can be made by phone. However, this option is only available for sole proprietorships located in foreign countries.
Ein-itin.com is a brand of Cohen Investment LLC, act as a Certified Acceptance Agency. Ein-itin.com provides professional services to prepare and apply for an Individual Tax Identification Number (ITIN) to submit through IRS. As a Certified Acceptance agent , Ein-itin.com prepares and submits applications for an Individual Taxpayer Identification Number (“ITIN”) on behalf of their applicants. Ein-itin.com tracks the application processing and notifies ITIN Applicants for their ITIN Confirmations. Ein-itin.com understands the applicant situation, inform before the ITIN Application process. Ein-itin.com helps to applicant to apply for their ITIN in a convenient way to avoid mistakes and rejection for ITIN Application. Any individual may hire us to prepare, submit and obtain his or her ITIN Number (via W7 Form) application to the IRS.