Welcome to a weekly feature on the Renés Points blog. Each week this series covers in a “rookie” way either a Delta or travel related theme and attempts to break down to a basic level each topic. You can read up on all the previous posts HERE. Now on to this week’s feature.
First off let me say I am not a tax expert and not telling you a course of action to follow. In fact my disclaimer at the bottom of each posts says as much.
Having said that, there are many reasons someone may want to have an EIN or Employer Identification Number as a sole proprietor. One reason may be as simple as “banking reasons” or in many frequent flyers’ case to be able to get a business credit card (many banks are now requiring an EIN number to get a business card).
I have also talked to my tax guy to ask if there are any risks to us, in our case my Lisa, getting one for banking reasons. He said no and in our situation and the only thing is if she worked and made money from her activities she could get a 1099 form detailing that. Also, any income she makes as a sole proprietor we just claim on our normal 1040 form anyway.
So how scary is it to get an EIN? It is amazingly simple and I will show you each step along the way.
You simply pick what kind of business you are going to be doing.
As you can see in our case, sole proprietor is the choice.
The next screen explains what a sole proprietor is and does.
Then, if you are needing an EIN for only banking purposes, you choose that. If not, pick the right one for you.
You then just fill in the blanks as requested
Same thing on the next page.
And you continue here as well confirming your name is right.
Check the right boxes and continue to the next page.
Choose your field you will be working in (in Lisa’s case, other).
If you do choose other, more choices, or you will have to “fill in the blank”
You can then get your EIN number electronically or in the mail (instant if you pick PDF).
You can then confirm all the info is correct before you submit your request.
Your EIN will be assigned to you and you can download the paperwork with the info.
That is it. You have now had an EIN assigned to you that you can use for whatever you need to use it for. If you are applying for business credit cards you can use the number immediately on the application. – René