I if start business as a sole proprietor, would my tax ID number be my SSN?
Question Details:
A sole proprietor can EITHER use the owner's social security number OR obtain its own EIN / tax id number.
However, running a business as a sole proprietor will not insulate from liability and you may want to consult with an attorney about possible ways to structure your new business. My firm offers this in Maryland and you are encouraged to consult a licensed attorney in your jurisdiction.
You can obtain an Employer Identification Number online at IRS.gov. The form is an SS-4. That is better than using your SS# because you can use the EIN for W-2s, 1099's and business pruposes for employees, customers and suppliers.
As a sole proprietor, all of your personal assets are at risk for business obligations. For liability protection purposes, you should have your tax and business lawyer establish a Limited Liability Company.
I hope this helps!
Ron Cappuccio
www.TaxEsq.com
If you are a sole proprietor, then your tax ID number is your social security number. If the business is a limited liability company (LLC) or corporation (Inc.), then the tax ID number would be the federal EIN, or employer identification number, you get when you form the business.
