SoleProprietor / Individual
If you are an individual and running your business on your own, then you called as Sole Proprietorship. A single person who is running the business as an individual is known as a Sole proprietorship. This is the easy and simplest form of business entity. Maintaining and running a business as an individual is very easy and riskless. The whole responsibility of business only depends on the owner. Expenses and income of the business are personal liabilities of an owner. Sole Proprietor/ Individuals are quite simple when compared to other business entities. Paying taxes for individual business also very easy. As a Sole Proprietorship, individuals had a doubt the either they need an EIN or not. To give you clarity, we provided complete details here. Go through the below sections and know when you need an EIN for your business.
As a Sole Proprietor/Individual, Should I Apply for a Federal Tax ID?
In most of the cases, Sole holder/Individual need not require an EIN number. But there are some specific cases when a sole-proprietor needs an EIN Number. It is better to have an Employer Identification Number (EIN) or a Federal Tax ID Number. With the help of the Federal Tax ID Number, sole-proprietor/Individual can able to open a bank account. Also, to apply for a credit card in the name of your business, individuals need an EIN number. Keep your Social Security Number (SSN) safe by using an EIN Number instead of SIN.
Mandatory to have an EIN for Sole-Proprietor
In some situations, individuals must have an EIN Number. The below are the cases to consists of an EIN Number.
- While hiring employees.
- To open a bank account (or) to apply a credit card for your business entity.
- Establishing a pension, retirement plan or profit sharing.
- To start an LLC or to take partners in your business.
Sole Proprietor/ Individuals do not need a new EIN
- During the name change of your business.
- While changing the location of your business.
Line by line Instructions to complete SS-4 Form as a Sole Proprietor/IndividualGo through the below EIN Application Form and fill it to take EIN Number from an IRS.
- 1. Fill your First name, last name and middle initial as present on the SSN Card. Don't mention or enter nicknames in the EIN Application Form.
- 2. Add your Social Security Number and verify it.
- 3. Enter your Business Name/ Trade Name.
- 4. Then, fill your Address of Business Entity, city, State, ZIP, Country along with your Phone Number. The address you enter can change at later times.
- 5. Select the Mailing address button then fill the details. Individuals get their EIN Number to the mail they enter in the EIN SS-4 Application Form.
- 6. Enter details such as month and Year you started your business.
- 7. Click on the dropdown list and select the reason you are applying for an EIN Number.
- 8. Also, select your primary activity from the drop-down box.
- 9. Choose yes/ no for the appear questions such as do you have highway motor vehicle, etc.
- 10. Select Yes/ No for the questions appear below the Additional Information.
- 11. Enter the name you wish to appear as EIN Recipient Name.
- 12. Enter email to get your EIN Number.
- 13. Also, fill EIN Recipient Phone to contact you.
- 14. Must check your details twice and then click on Save & Continue.