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I have my own business as a sole proprietor. I have read at several places online the suggestion to get EIN to give to clients instead of my SSN.

Is that good advice? Schedule C only asks for SSN. I don't see a place to also put the EIN so the IRS can match up the 1099s and my tax return.

Barbara
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I have my own business as a sole proprietor. I have read at several places online the suggestion to get EIN to give to clients instead of my SSN.

Is that good advice?


I think it is, given what one hears about identity theft. The instructions for Form W-9, which is what you use to inform payers of your TIN, say that the IRS prefers you use your SSN, but if you have an EIN that's fine.

Schedule C only asks for SSN. I don't see a place to also put the EIN so the IRS can match up the 1099s and my tax return.

See item D on Schedule C. Don't worry about IRS matching. They're not going to be upset if you report more income than was reported to them on 1099's.

Phil
Rule Your Retirement Home Fool
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I do not really have a business, so I have no employees either, so I would not expect to have an EIN.

But in the mid 1990s, I engaged in two financial transactions where I was required to pay an excise tax. So I got the form to do that and it required an EIN. I put my SSN in there and the IRS said it was not acceptable, an EIN was required.

So I make up a phony name for a non-existent business, sent it to the IRS who issued me an EIN. I put that into the form and paid the tax.

Next year they sent me form to complete the tax return for that business, so I filled it out. No sales, no income, no expenses, no assets. I sent that in. They sent me forms for a few more years, and then they must have assumed I went out of business.
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So I make up a phony name for a non-existent business, sent it to the IRS who issued me an EIN. I put that into the form and paid the tax.

For future reference and for lurkers, this was a totally unnecessary exercise in MSU. Despite the name Employer Identification Number, one doesn't need a business, let alone employees, to get one. You tell them that it's for an individual and they don't go looking for any kind of income report under the EIN.

Phil
Rule Your Retirement Home Fool
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So I make up a phony name for a non-existent business, sent it to the IRS who issued me an EIN. I put that into the form and paid the tax.

For future reference and for lurkers, this was a totally unnecessary exercise in MSU. Despite the name Employer Identification Number, one doesn't need a business, let alone employees, to get one. You tell them that it's for an individual and they don't go looking for any kind of income report under the EIN.


I do not understand your reply -- this does not mean I disagree with it.

The issue in question was I bought a single payment annuity from a Swiss insurance company. This, in contrast to a US issued annuity, is subject to a 1% federal excise tax. And that is paid on some form or other, and that form requires an EIN. I assumed I could just put my SSN in there, but the IRS rejected it. That is why I got my own EIN. This would have been in 1996, if I remember correctly.

I do not know what MSU is.
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I bought a single payment annuity from a Swiss insurance company. This, in contrast to a US issued annuity, is subject to a 1% federal excise tax. And that is paid on some form or other, and that form requires an EIN. I assumed I could just put my SSN in there, but the IRS rejected it. That is why I got my own EIN. This would have been in 1996, if I remember correctly.

Right. Nothing wrong with that. Only certain returns can be processed with an SSN, and excise tax isn't one of them.

I do not know what MSU is.

Making stuff up. Here's an example:

So I make up a phony name for a non-existent business, sent it to the IRS who issued me an EIN.

That's the part I was commenting on as unnecessary. You could have just put your name and address, no business name, indicated no employees and that you were an individual.

Phil
Rule Your Retirement Home Fool
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Thanks, Phil.

I will probably get an EIN then because I will be working virtually and won't know who my clients are in real life!

Barbara
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"I do not know what MSU is. "

Could MSU stand for Make Something Up?

Sue
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