EIN vs. SSN

Business
1

Hello. I want to apply to some ad networks in the near future, and don’t know if I should use my SSN or apply for an EIN and use that.
I am going to start off as a sole prop running my content sites and generating revune from ads. And later on, incorporate or become and LLC.
If I use an EIN for now, how does that work for filing taxes? Does anyone have any advice for me? How do others who get income from ads do this?
If I need to ask an accountant, I can, but I was hoping this wouldn’t be too complex of an issue.

Thanks for your help.

2

You can use your SSN if you are sole proprietor, no reason to apply for EIN. Even better if you don’t provide either

3

How is it better if you don’t provide either?

4

For privacy, no one can steal it. I hope Google employees get paid enough not to involve in identity theft, but who knows :slight_smile:

5

You have to provide one or the other for tax purposes.

6

Not really, in California (in any state actually) they are encouraged to ask for your SSN but are not required to get it. In other words, they have to ask for it but you don’t have to give it. But the problem is that Adsense registration form makes SSN a required field (I think?), so you’d have to pick up the phone and call them, which makes otherwise simple process pain in the butt. The original poster didn’t mention what ad network in particular he wants to join though.
But my point was that if you are sole proprietor, there is no need to spend time and money on EIN

7

Every reputable ad network we have ever dealt with required a SSN or EIN for tax purposes. How else are they going to send the required information to the government so you can declare the revenue and deductions on your taxes.

8

anything that you can be 1099’ed for, you have to give either SSN or EIN. I personally have an EIN, even though I am a single member LLC, so even though the IRS prefers SSN for single member LLCs, they can bite the bullet on this one because I do most all of my business online and prefer giving out my EIN over my SSN.

FYI demosfen, 1099’s are federal forms for federal income tax and fall under federal regulations, not state regulations… so in this case, CA has to bite it [the bullet that is].

If you do alot of independent contracting and you’ve never filled out any W9’s, well may god have mercy on you when the IRA comes a knockin’.

PS. you can file for an EIN online now, and be assigned one immediately. It takes about 10 minutes.

9

It’s a myth guys, albeit a really, really popular one. Private companies are not required to get your SSN, even if it’s for 1099 form.
You don’t have to trust me on that - if you send a letter to California (or any other state) Employment Development Department and ask them about it,
their reply will be similar to this.

Here is an article about dealing with private companies that ask you for SSN - credit goes to Corey Bryant for sending me the link.

10

number 1, being hired as an employee is not the same as being an independent contractor.

number 2, 1099s, W9s, etc are all FEDERAL forms. States have no say over the regulations regarding them.

number 3, if you fail to put your SSN/EIN on a W9 form or incorrectly fill it out, the requester is required to withhold taxes on you (hint, the entire point of filling out a W9 is so that as an independent contractor, the hiring party doesn’t withhold your taxes)

www.irs.gov - get it from the horse’s mouth if you don’t believe me.

11

I don’t have a link, but somewhere on IRS website there are instructions how employers should withhold taxes if there is no SSN.
No one is even required to have SSN in the first place, so if we were required to have SSN to pay taxes, it would be a simple matter of sending our SS cards back to Social Security Administration to avoid paying taxes altogether.
The government collected income tax since 1913, long before SS cards were even issued (1950s or 60s I think). They had a way to collect taxes if you didn’t have SSN, and they still do.

12

Can you point to where it says on a Federal website that you don’t need a SSN?

13

Yes it is called the Taxpayer Identification Number (TIN). For individuals, this is the same as your SSN. If you don’t have an SSN, but are required to have a US TIN, you must get a SSN if you are eligible to receive one. Only if you are not eligible for an SSN can you get an Individual Taxpayer Identification Number (ITIN), which basically means only foreign nationals who don’t qualify for a SSN can get an ITIN. Under federal law, you cannot have both an SSN and an ITIN.

Businesses have EINs (Employer Identification Number), which they use as their TIN for tax reporting. Sole proprietors can use either their SSN or obtain an EIN (IRS says for sole proprietor they prefer SSN). Single member LLCs can also use their SSN or obtain an EIN.

When you fill out your W9’s or an equivalent form, you MUST provide your TIN so that the hiring party does not withhold your taxes. As a sole proprietor/single member LLC, your TIN is either your SSN or EIN. You have to give one or the other if you don’t want your taxes withheld (you do not want this as an independent contractor).

14

It works the same as with an SSN, except where they ask for your TIN, instead of filling in the SSN space or putting in your SSN (if only one space), you fill in the EIN space or put in your EIN (if only one space).

Also, if you later become a single member LLC, the government disregards the business entity for tax purposes and treats you as a sole proprietor, and I think nearly all states do the same (probably all do), so reporting taxes as a single member LLC is basically the same as reporting taxes as a sole proprietor.

15

Definitely get an EIN, it’s free and will keep your SSN private. Your SSN should be your most well kept secret. If someone has basic information, such as your address and name, with your SSN they can practically assume your identity. I don’t give mine out in general… only in certain circumstances like for medical treatment/insurance purposes, or to get a loan.

16

There is no federal law that requires a person to have SSN - therefore it’s not required. What you could do is send a letter or email SSA and ask them. I’ll try to come up with some links later

17

The US government is a bureaucracy, and so each department has very specific tasks or areas they govern. This is one reason it takes forever to get anything done.

But, yes according to the SSA, an SSN is not required. However, the SSA is not the agency in charge of taxation, so it would be pointless to go to them with tax questions. The IRS is in charge of federal taxes, and they are who you go to about federal tax issues, not the SSA. To pay federal income tax, you need a TIN, which in the case of a self employed person is their SSN/EIN or ITIN number.

from http://www.irs.gov/businesses/small/article/0,,id=98846,00.html

How to Pay Self-Employment Tax:

To pay SE tax, you must have a social security number (SSN) or an individual taxpayer identification number (ITIN).

And again, you can only get an ITIN if you are foreign and are not eligible for an SSN:

The IRS will issue you an ITIN if you are a nonresident or resident alien and you do not have and are not eligible to get an SSN.

This automatically disqualifies all natural born US citizens from getting an ITIN.

You are partially correct in that the SSA does not require that citizens must have an SSN; however, it is what the IRS uses for an individual’s TIN number, which includes use in income tax and SE tax (though for self employed, you can get an EIN instead from the IRS).

So yeah the SSA doesn’t require you to have one, but you’ll have one hell of a time trying to pay taxes (among other things) without one. And yes, as a sole proprietor/single member LLC, you need an SSN to get your EIN.

18

You’ll also have a very hard time getting social security checks if you retire, become permanently disabled, etc.

19

Technically speaking, IRS does require that you have SSN. However, IRS directives are private law, not common law, and as such are not enforcible. Only the Congress can make federal laws. If you don’t have SSN or don’t provide it, IRS will still take your taxes, they don’t have other choice. Just because they are a government agency doesn’t mean they are not regulated by laws. What other choice would they have, sue you? What would they tell the judge? You are not in violation of federal law by not having/not providing SSN. IRS requirements are just that - requirements. Don’t be misled by the fact that IRS is a federal agency, it doesn’t make their directives any different from anybody else’s. But we’re getting off topic here

20

Go ahead and try it, but don’t come crying to us when you get thrown in jail for tax evasion.