Home › Forums › General Questions › EIN instead of SS … basics
- This topic has 6 replies, 4 voices, and was last updated 10 years, 10 months ago by Art Munson.
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angopopParticipant
I’ve been looking for a thread here about the benefit of using an EIN instead of a Soc Sec number (that way your SS # isn’t going out to a million places) … but I haven’t been able to find that discussion by doing a search.
Does anyone know if I need to be a business (dba or business license, etc..) to be able to use an EIN, or can anyone get an EIN? And if so, do you have a business account at your bank to keep all this separate? I live in Los Angeles, I know the rules are different depending where in the US you live.
Right now I don’t make enough money from libraries so it doesn’t make sense to start a business, but in the long run, perhaps…
What do you guys do?
Art MunsonKeymasterI have an EIN (employer identification number) and am in the L.A. area. You need a separate entity for federal tax purposes. Mine is an LLC and in Calif. it’s $800 per year. I always use the EIN when I can.
Mark_PetrieParticipantWe have one but that’s because we have a corporation. I think (maybe wrong about this) you need to at least be a registered partnership, LLC or corp. You really should ask a qualified accountant about this stuff.
Here’s a link from the IRS: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Do-You-Need-an-EIN%3FArt MunsonKeymasterI got one about a year and a half ago with no problem. I’m in Missouri, but I don’t recall where one lives making a difference. I applied as a sole proprietor; under “Principal products/services” I put “Music Composition”. Under “Reason for Applying” I chose “Starting a new business”.
I was actually surprised at how easy it was. Check the IRS website for information on how to do it.
I’m really glad I have it. It takes the trepidation out of submitting forms that require your SS number.
angopopParticipantThanks, that’s all helpful.
At what point in your library music careers did you guys create an LLC or a corporation?
I’d like to not hand out my SS to all the music libraries, but I don’t feel that I’m ready to create an LLC and spend $800 per year…
Mark_PetrieParticipantOnce you make over $100k a year, the general consensus is that the tax benefits of incorporating outweigh the fees and accounting costs.
Art MunsonKeymasterI don’t think you need to make $100k a year to benefit. An LLC (Limited Liability Company) is much easier to deal with than a corporation.
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