For all these things I think just having an EIN is simpler.
You don’t even need that to start; you set up Capital One (for example) business accounts using your SSN. The EIN is just to avoid putting your personal SSN on invoices.
LLC matters if you think you’ll have liability risks.
>The EIN is just to avoid putting your personal SSN on invoices.
In order to do that, your LLC has to elect to be taxed as an S-corp, which requires it to file its own return. Worse, certain states and cities will impose a corporation tax on it.
Otherwise, if you retain disregarded entity status, you have to use your personal SSN for invoices. The corporation EIN is then mostly for employment tax purposes.
(Not actual tax advice)
"For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number (TIN) and Certification, the W-9 should provide the owner’s SSN or EIN, not the LLC’s EIN." [0]
I have an EIN for my Sole Prop consulting business, and no LLC. They are orthogonal concepts.
It’s really easy to get an EIN online without forming an LLC. This is sufficient for any sole proprietor business where you don’t need liability protection or employees.
No, it's not orthogonal. You don't get that benefit for an LLC. It's written on the W-9 form itself. Thus it's a reason why _not_ to have an LLC.
"If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN.
If you are a single-member LLC that is disregarded as an entity
separate from its owner, enter the owner’s SSN (or EIN, if the owner has
one). If the LLC is classified as a corporation or partnership, enter the
entity’s EIN" [0]
theptip · · focus · HN ↗
You don’t even need that to start; you set up Capital One (for example) business accounts using your SSN. The EIN is just to avoid putting your personal SSN on invoices.
LLC matters if you think you’ll have liability risks.
sam1714 · · focus · HN ↗
In order to do that, your LLC has to elect to be taxed as an S-corp, which requires it to file its own return. Worse, certain states and cities will impose a corporation tax on it.
Otherwise, if you retain disregarded entity status, you have to use your personal SSN for invoices. The corporation EIN is then mostly for employment tax purposes.
(Not actual tax advice)
"For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number (TIN) and Certification, the W-9 should provide the owner’s SSN or EIN, not the LLC’s EIN." [0]
[0] <a href="https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies" rel="nofollow">https://www.irs.gov/businesses/small-businesses-self-employe...
theptip · · focus · HN ↗
I have an EIN for my Sole Prop consulting business, and no LLC. They are orthogonal concepts.
It’s really easy to get an EIN online without forming an LLC. This is sufficient for any sole proprietor business where you don’t need liability protection or employees.
sam1714 · · focus · HN ↗
"If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN.
If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). If the LLC is classified as a corporation or partnership, enter the entity’s EIN" [0]
[0] <a href="https://www.irs.gov/pub/irs-pdf/fw9.pdf" rel="nofollow">https://www.irs.gov/pub/irs-pdf/fw9.pdf
yencabulator · · focus · HN ↗