I'm starting a business as a sole proprietor performing web development services. Should I procure an EIN for the business and why or why not?
2 Answers from Attorneys
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Bob Beatson, 8-21-2019, 11:05 a.m. EST
Law Offices of Robert Beatson II
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Potomac, MD 20854
Practice areas: Tax, business law, computer/high tech/biotech law, intellectual property, trusts/estates/wills, real estate, civil litigation, mediation.
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No, I don't think you need to and on a small scale business I think you should not get a separate EIN.
A sole proprietorship is by its nature just you as an individual doing business in your own name.
It is possible to set up a separate EIN as the taxpayer identification number for a sole proprietorship.
And a sole proprietorship can grow to be quite big over time and with success.
The only reason to set up a separate EIN for a small business in your own name would be if you want to keep your social security number confidential from clients who might have to issue you 1099's for income.
But if you are interested in setting up a separate identity for your business from yourself, then you probably should go all the way to setting up an LLC or corporation which will be taxed directly as you as an individual under Subchapter S.
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