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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12046
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I am a self employed contractor. I use my social security

Customer Question

I am a self employed contractor. I use my social security number to file taxes. I recently hired an employee. As I understand it, I have to get an EIN number in order to report withholdings for the employee. Can I still file taxes under my social security number, or do I have to switch to the EIN number?
Submitted: 1 year ago.
Category: Tax
Expert:  Mark Taylor replied 1 year ago.

As a sole proprietor you would still file the income and expenses on Schedule C of your 1040.

Expert:  Mark Taylor replied 1 year ago.

You would include the EIN on the Schedule C.

Expert:  Mark Taylor replied 1 year ago.

Do you have any plans of incorporating or forming an LLC?

Expert:  Mark Taylor replied 1 year ago.

I hope you found this information to be beneficial. If this answered your question please take a few moments to rate my response. A rating is needed in order for me to receive credit for helping you today. The rating bar is located at the top of the page – ranging from 1 to 5 stars. If you need me to clarify aspect of my response or if there are additional areas of the question that you would like me to consider please let me know. I would be happy to continue the discussion. It has been my pleasure helping you today.

Expert:  Mark Taylor replied 1 year ago.

Please let me know if you have any other questions or need clarification. I am happy to help.

Expert:  Lane replied 1 year ago.

HI,

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I have a different answer.

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You MUST continue to use oyur Social Security number, unless you bring on another OWNER.

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Although the EIN is needed for payroll taxes, you must use your Social Security nnumber for your personal tax filing (including the Schedule C), and for any W-9's that payors may need from you as well.

Expert:  Lane replied 1 year ago.

Here's the IRS guidance on this: https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies

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From there: (I'll underline the pertinent part)

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"For federal income tax purposes, a single-member LLC classified as a disregarded entity generally must use the owner's social security number (SSN) or EIN for all information returns and reporting related to income tax. For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number and Certification, the W-9 should provide the owner’s SSN or EIN, not the LLC’s EIN.

Expert:  Lane replied 1 year ago.

And from a good anecdotal (not authority of law, but very readable) overview by the Attorneys at Nolo.com.

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As a sole proprietorship doing business through an LLC, you do not need a separate EIN number unless you have employees or are required to file excise tax returns.

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By default, owners of single-member LLCs report the business profits and losses from the LLC on their personal tax returns using their own Social Security number or tax identification number.

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Owners of single-member LLCs are not required to have separate EINs because they are not considered employees of the LLC by the IRS.

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However, if your single-member LLC has other employees you are required to obtain an EIN and file employment taxes.

Expert:  Lane replied 1 year ago.

Again, you do NOT use the EIN on your schedule C, you only use the EIN on the 941's for filing quarterly payroll taxes, and for the pay-in of payroll taxes.

Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

Otherwise I’m working for no crediting at all here

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Thank you!

Lane

I hold a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986