IRS/Tax question re: EIN *****UPDATE****

[dfchelbay]

Hi everyone. I have a tax question. I own my own business and have always just filed all my income under my own social security number with IRS. Back in May I agreed to do some work for a company on an ongoing basis and they have paid me albeit sporadically at times. Yesterday, I received a check from them for work I did over a month ago and in the envelope was a W-9 for me to fill out & return. Normally, I would have no issue filling it out, but I've come to realize that one of the people in this company is as shady as they come. It happens to be the person asking for the W-9 too. I am hesitant to fill out the form. Here's my dilemma: It's really good money & I don't want to lose it, but I do not wish to give this person my social security number. I do everything above board so I will absolutely include the income on my IRS return.

Here's what I'm considering doing:

Applying for an EIN (Employer Identification Number) with the IRS. Has anyone done this? Can I have an EIN for this business activity and my SSN for all my other income? Or, if/when I get the EIN I can put all sources of incomes under that on the business forms I attach to my 1040.

Anyone use an EIN for their business? If so, do you have any issues or tax ramifications? I've always done everything under my own SSN & attached Schedule C (Net Profit from Business) and Schedule SE (Self Employment Tax).

I'm hoping I can put everything under an EIN and have my taxes remain unchanged, i.e. same amount owed as if using my own SSN. It's unknown to me right now if there are tax ramifications to using EIN versus SSN.

I look forward to hearing from those that already do this. Thanks

 

[scrapquitler]

Hi everyone. I have a tax question. I own my own business and have always just filed all my income under my own social security number with IRS. Back in May I agreed to do some work for a company on an ongoing basis and they have paid me albeit sporadically at times. Yesterday, I received a check from them for work I did over a month ago and in the envelope was a W-9 for me to fill out & return. Normally, I would have no issue filling it out, but I've come to realize that one of the people in this company is as shady as they come. It happens to be the person asking for the W-9 too. I am hesitant to fill out the form. Here's my dilemma: It's really good money & I don't want to lose it, but I do not wish to give this person my social security number. I do everything above board so I will absolutely include the income on my IRS return.

Here's what I'm considering doing:

Applying for an EIN (Employer Identification Number) with the IRS. Has anyone done this? Can I have an EIN for this business activity and my SSN for all my other income? Or, if/when I get the EIN I can put all sources of incomes under that on the business forms I attach to my 1040.

Anyone use an EIN for their business? If so, do you have any issues or tax ramifications? I've always done everything under my own SSN & attached Schedule C (Net Profit from Business) and Schedule SE (Self Employment Tax).

I'm hoping I can put everything under an EIN and have my taxes remain unchanged, i.e. same amount owed as if using my own SSN. It's unknown to me right now if there are tax ramifications to using EIN versus SSN.

I look forward to hearing from those that already do this. Thanks

Check with a CPA.

We file a partnership return, but we are established as an LLC. You may also have to deal with sales tax filing, depending on your state and the type of services you provide.

I wouldn't work for someone who I was afraid to provide my social security number to.

 

[dfchelbay]

Check with a CPA.

We file a partnership return, but we are established as an LLC. You may also have to deal with sales tax filing, depending on your state and the type of services you provide.

I wouldn't work for someone who I was afraid to provide my social security number to.

Thanks for your reply. I don't sell anything. It's a straight 1099 from them. The owner of the company is great. It's a relative of his that is the issue and she handles all the office paperwork. I'm thinking, if all things equal, maybe an EIN is the right way to go. I may have other companies that hire me in the future and I'm sure they'll 1099 me as well. I'm overly caution and protective of my SSN and my credit.

 

[pklein09]

If you earn over $600, the company is required to give you a 1099 MISC for your work. In order to do that, they need your SSN or EIN. I work part time for someone, and I fill out the 1099s at the end of the year for her. Why she wants you to fill out the W-9 instead of just taking your word for it, I don't know. I can't advise you on which path to take, but I'm guessing that you hit the threshold for the necessity to issue the 1099.

 

[yoopermom]

My DH has an EIN for his construction business, it was not difficult to get, and we did so specifically for the reason you state (I didn't want his ss# being given out freely). We do taxes just like always, but on the schedule C it has his EIN # listed, obviously. To the best of my knowledge, it doesn't affect our tax outcome in any way.

As another PP has stated, he occasionally gets a 1099MISC if he does a job over $600 for a company. If they don't already have his EIN on file, they usually either call or write asking for it, no big deal.

I would definately protect yourself and get an EIN for the business.

Terri

 

[wiigirl]

My DH has an EIN for his construction business, it was not difficult to get, and we did so specifically for the reason you state (I didn't want his ss# being given out freely). We do taxes just like always, but on the schedule C it has his EIN # listed, obviously. To the best of my knowledge, it doesn't affect our tax outcome in any way.

As another PP has stated, he occasionally gets a 1099MISC if he does a job over $600 for a company. If they don't already have his EIN on file, they usually either call or write asking for it, no big deal.

I would definately protect yourself and get an EIN for the business.

Terri

x2

 

[mrp4352]

Why she wants you to fill out the W-9 instead of just taking your word for it, I don't know.

I can help here a little bit! My company is required to have a W-9 on file for all companies we issue 1099s to. If the IRS decides to audit, we are subject to fines if the W9 can not be provided. (now, I don't know if that's because we're a corporation or because we have some govenment contracts...)

 

[grassmower]

I'd go ahead and apply for the EIN #. If you receive 1099 forms with both your SS # and your EIN# it makes no difference just plop them on your schedule C at tax time and your good.

I have a EIN for my small business for the sole purpose of not giving out my SS number.

 

[Swimalie]

I have my own at-home business where I don't sell goods but sell services and I have an EIN. It hasn't caused me any problems in the 10+ years I've had it.

 

[Claire&TheBoys]

Yes, you can get an EIN and still file Schedule C. You will be a Sole Proprietor.

Go online to irs.gov and you can file online. Then, send back the W-9 to the company with "Applied For" on it. Supply the number when it comes in.

 

[Anthony1971]

The company you are doing the work by law is supposed to have the 1099 on file before you do any work. That is not your problem however. I would apply for an EIN now. It will be needed in early January for them to send you a 1099misc and the company to file a 1096.

 

[dfchelbay]

Thanks for all the responses. I'm going to do the EIN and file everything as I always have with the IRS but use the EIN on my schedule C. I didn't have time to research whether I would pay more taxes or not like I would if I were a corporation. So, thanks to all of you that informed me that everything will remain as they are for me now.

Thanks again.

 

[Allison]

The company you are doing the work by law is supposed to have the 1099 on file before you do any work. That is not your problem however. I would apply for an EIN now. It will be needed in early January for them to send you a 1099misc and the company to file a 1096.

They need the w-9 on file not the 1099.

 

[dfchelbay]

Op here. I wanted to give an update on how this all worked out. I did get the EIN number from the IRS & filled out the W-9 and returned it. Well, as soon as they got my tax information, the problems started. Checks started being delayed, not written, forgotten, incorrect amounts, etc. Every excuse in the book. I'm still waiting to be paid and I am now getting copies of fake emails sent to me. After I submit my time/materials, a month later I get fake emails that are supposed to be proof they told me not to do this & do that, etc. Basically, this person is trying to create a fake paper trail to justify not paying me money owed. So, I guess my gut feeling about her was right. Well, now I am printing up emails she sent to me giving the go ahead for the work I did long after her fake emails.

I'm going to have a talk with a person in a position of power there soon and show all this paper work and see what they say. If I don't get the money owed me, my next step is small claims court to get the money. I will tell the boss there that I will subpoena both of their clients that I did work for (hoping this will make them pay me so their client won't know they're doing this) We'll see if that motivates them to do the right thing.

Who does something so fraudulent? Creating fake emails saying they were sent to me. Fortunately, I save all emails and have emails from this person weeks after her fake emails thanking me for my work and saying she'll get my check in to the mail immediately.

I'll let you all know what happens after the meeting with her boss. It just disgusts me the level this woman would go to to cover her a$$ & to not pay me for the work that I've already done.

 

[chris31997]

Op here. I wanted to give an update on how this all worked out. I did get the EIN number from the IRS & filled out the W-9 and returned it. Well, as soon as they got my tax information, the problems started. Checks started being delayed, not written, forgotten, incorrect amounts, etc. Every excuse in the book. I'm still waiting to be paid and I am now getting copies of fake emails sent to me. After I submit my time/materials, a month later I get fake emails that are supposed to be proof they told me not to do this & do that, etc. Basically, this person is trying to create a fake paper trail to justify not paying me money owed. So, I guess my gut feeling about her was right. Well, now I am printing up emails she sent to me giving the go ahead for the work I did long after her fake emails.

I'm going to have a talk with a person in a position of power there soon and show all this paper work and see what they say. If I don't get the money owed me, my next step is small claims court to get the money. I will tell the boss there that I will subpoena both of their clients that I did work for (hoping this will make them pay me so their client won't know they're doing this) We'll see if that motivates them to do the right thing.

Who does something so fraudulent? Creating fake emails saying they were sent to me. Fortunately, I save all emails and have emails from this person weeks after her fake emails thanking me for my work and saying she'll get my check in to the mail immediately.

I'll let you all know what happens after the meeting with her boss. It just disgusts me the level this woman would go to to cover her a$$ & to not pay me for the work that I've already done.

I wonder if she claimed your work for her own. Her character has really shown. It is great that you listened to your gut and saved everything. I hope it all works out for you.