I run a website, and it's actually just a hobby. But I make a lot of money from it and am getting a whole bunch of requests from advertisers to advertise on my site. I'd love to be a part of them all, but one of the things they need though is my social security number. Now that makes me feel a little uncomfortable because their not Google, Yahoo, or even ValueClick sized. And the idea of my SSN out their in an age of identity theft isn't the smartest idea. If even one of the employees from a potential advertiser accidentally disposes of a document with my SSN on it and the wrong person gets a hold of it, it could mean trouble for me. I was thinking of getting an EIN, but am not exactly sure on the process. I don't have any employees or anything - its just me. I know I fill out a form and apply for one, but when it comes to do taxes, will I be filing them any different than I would my regular taxes? Would they all go on the same tax return or how would that work? Also how long does it take for me to get an EIN once I have applied?
Get an EIN, it's free and they give it to you over the phone if you call the number on the IRS website. You are the employee of a 1 employee company. DO NOT give out your social.
I think you should talk to an accountant about your situation. I'm in a similar position. I have to give out my social security a lot since I'm a sole proprietor. I check out the companies I send it to before I send it and I never give it over the phone. I would recommend going to an accountant for all your tax needs. It can get very tricky dealing with your business taxes.
You can get a EIN online in seconds, but keep in mind its a good idea to atleast talk to an accountant before you do anything. Mark
Getting an EIN is cake, even if you're a sole proprietor. But like everyone mentioned, talk to an accountant and at least get a sole proprietorship up and running first. (also easy and can be free)
well, i run my web site as a hobby, but i make money from it, so couldn't that be called a sole proprietorship? you don't have to file anything with the IRS, like your business name, with a sole proprietorship do you? also, i don't understand why I would need to talk to an accountant? isn't it more beneficial to ask the IRS directly (and free as well)? thanks for your help everyone, it's really appreciated. i would love to hear more of your responses.
I had HR Block set me all up. They answered all my questions, and gave me info on how to move in the right direction...
If it makes money, it's a business, and the income needs reported so you can pay lots of taxes on it, so you have to register it... or launder the money and hope the IRS doesn't find out... You could still file a schedule C to report the income without being an official sole proprietor, but it's probably a better idea to actually register it. The difference is that the accountant is on your side.
what? are you serious?!? i took a business class a year ago and never learned that you have to register a sole proprietorship. i thought you run it and then just include it on 1 tax return as if you were an employee somewhere. i mean the site is in my name, so i don't understand why i would have to register? i have been filing my income under 1099-misc and as a hobby...since that what it is... but I want an EIN so I don't have to give out my SSN.
Well that must have been one useless business class! I know the first thing we were taught in Introduction to Management was the different types of corporations and why you have to register as a business.
First, college text books are guidelines and are useless when it comes into the business world. If every time I had an issue with my business and I ran to my management college text book I would have wasted a lot of time and lost of lot of business. The filing in a sole proprietorship depends on your local government body. Some local governments do not require you to have a business license or register with them. For example, when we first started up three plus years ago I went down to the County Clerks office and registered a DBA that lasted five years for $10.00. The only reason why I had to do this is because I was not operating under Zachary R. McClung. If you are operating under you own name there is a good chance you do not need to file anything. Second, the filing a tax return depends on how much income you’re actually making. I believe at the last time it was over $400.00 per year in earnings before you had to file a tax return. I always tell individuals though that it is better to file a loss and use it later on; however, after x amount of years of showing small income they will classify your business as a hobby anyway. Since I do not know local laws call your county clerks office, a lawyer, and tax accountant. They will get you setup properly with no worries from Uncle Sam. Finally, never go to a forum for tax or legal advice. Many individuals blow smoke up your butt. Some of us actually have our college degrees for Accounting and work with lawyers on a daily basis.