EIN for Sole Proprietorship

EIN for Sole Proprietorship

Do I need an EIN even if I am applying for a sole proprietorship?

As it has been already known that an EIN is known as a federal tax identification number or an employer identification number and used for identifying businesses for tax-related purposes by the Internal Revenue Service (IRS). It comprises of a nine-digit number.

Significance and requirement of EIN

If the company owners have workers, are part of a Keogh plan or are cooperating with trusts, estates, NGOs, farmers and plan administrations, the IRS is highly encouraging companies to get an EIN online. Also, they are in need to file assuming that they operate as a partnership or Corporation for a non-resident alien.

On the other hand, for banking transactions and all operations, an EIN is needed.

Sole Proprietorship

A sole proprietorship, also known as a sole trader, is an unincorporated business with a single owner who pays personal income tax on profits earned from the company. Many sole proprietors do business under their names because creating a separate company or trade name isn’t necessary for that kind of business type. When it is compared to the other types of business, in this type, it is easier to establish.

EIN for Sole Proprietorship

There is no need for a sole proprietorship to get an EIN since the social security number can be used as an EIN. However, it is going to be better if the EIN is taken,  because it is more professional. On the condition that an employee is hired, EIN is the must. But if you are not a US citizen and if you don’t have an SSN, then you need to apply for EIN.

You may apply for EIN with our online application service.