EIN for a sole proprietorQuestion Does a sole proprietor need an Employee Identification Number (EIN)?
Answer Not necessarily. They may use their Social Security number rather than an EIN for federal tax reporting.
A sole proprietor must, however, use an EIN if the business has any employees or maintains a qualified retirement plan. A sole proprietor may need an EIN to open a business bank account. An EIN can also be used in place of a Social Security number by an independent contractor for purposes of Form 1099-MISC reporting.
Brain Trust contributor:
Author of J.K. Lasser's Small Business Taxes 2007
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