Can sole proprietor use their SSN to issue 1099-Misc

Yes, a sole proprietor can use her Social Security Number as her tax ID number. The IRS says that's what they prefer. Personally I don't like giving out my personal SS# any more than necessary, so I use an EIN for business purposes.

It's easy to get an EIN - the IRS says it takes 15 minutes to get it on line. Start by filling out Form SS-4:

The instructions are here:

Then take that information and use it for the on-line application, which starts here:

Here is a tip I learned the hard way: if you get an EIN for your proprietorship and change its name, you are in for endless pain.

The IRS won't issue you another EIN, and there's no way I can tell to change the name, so every year I get notices from clients saying that their EIN matching system rejected my EIN because it doesn't match the name under which I now do business. I tell them to tell the IRS the old name and that seems to work.

The long term solution seems to be to move everything into my single member LLC.

R's, John

That goes along with the IRS preference that you don't use an EIN if you are a sole proprietor. According to the IRS you should only need to send a letter to the address where you file your 1040, to notify them of a change of name. If that doesn't work, you could file suit against them in Federal District Court. That should get their attention.

The one that already has an EIN? Unless you have it taxed as a corporation, I don't see the IRS treating it any differently.

In article <XnsAB537CF37A454spamtraplexregiacom@130.133.4.11> you write:

Worth a try.

It has an EIN that matches the name. When I changed from multi- to single member, the name didn't change.

Thank you for that information. The business has just transitioned to an LLC so it would be a reasonable time to get the EIN. I agree about minimizing the spread of SSNs, but in this case it would only be one 1099.

But it leads to my next question that might be a separate thread.

Business started the year as a sole proprietor DBA. During the year the paperwork for LLC was done and banking accounts set up. There isn't a clear date when the business really started functioning as LLC. There was no change in the nature of the business. My logic says it's all the same business so it's one Schedule C - but logic isn't always the case with the IRS.

So can all the income and expenses go on one Schedule C ? Or do we have to pick some date and try to apportion everything. If that is the case, how do we handle items being depreciated?

As long as you don't elect the business be taxed as a corporation, and you don't take on any partners, then it should be treated (for most tax purposes) just as it did before. If you have employees there are some differences, but in general it's ignored for tax purposes.

No, the LLC is treated as if it's not there. Just do what you've always done, and treat it like the same business - that's what the IRS does.

The business is there enough to exist on a Schedule C. My tax accountant prepares separate Sched C for my old business, the one with the two names, and for the LLC.

In the case at hand, if it's actually the same business it's hard to think of a reason not to do one Sched C that matches the business name on the 1099.

I agree. In some circumstances it might make sense to be taxed as a corporation, but not often, especially for very small businesses.