Do Sole Proprietors Need an Employee Identification Number?
Q: I'm starting a business as a sole proprietor. I don't plan to have any employees. Do I need an employee identification number, or can I just use my Social Security number?
A: You probably need an EIN. You'll need this number to open a business bank account or start a qualified retirement plan for yourself. And should you have employees in the future, you'll need the number at that time. To obtain an EIN, file Form SS-4 with the IRS (you can even get a number assigned to you over the phone by following the instructions on the form).
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BARBARA WELTMAN is an attorney and a trusted professional advocate for small businesses and entrepreneurs. She is the author with such titles as J.K. Lasser’s Small Business Taxes and Smooth Failing, and she contributes regularly to American Express OPEN and SBA.gov. Her articles have appeared in the Wall Street Journal and U.S. News and World Report. Weltman is also the publisher of Idea of the Day and monthly e-newsletter Big Ideas for Small Business at www.barbaraweltman.com and hosts radio shows and podcasts, including Build Your Business radio. She has been named one of the 100 Small Business Influencers in the U.S. for the third year in a row.
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