Tax: TINs and 1099s

Confused about TINs and EINs? Here’s info to help you decide which to use in your business.

Dear Janet,

I’m starting a home business and want to keep the business finances separate from my personal finances. Would it be better to apply for a TIN or EIN? Currently I have no plans to hire any employees.

–High Hopes

 

Dear Hopes,

TIN is an acronym for Taxpayer Identification Number. This can be either your social security number, or an Employer Identification Number (EIN). If you are going to operate as a sole proprietor and won’t have employees, you can use your social security number as your TIN. You can use the social security number (along with a DBA certificate) to open a bank account in the business name. If you later decide to hire employees, then you would apply to the IRS for an EIN.

Dear Janet,

We deal with several LLC’s and are confused about what to do with 1099s for the LLCs. We have issued some checks during the year to the LLCs and some to the individuals in the LLCs. How do we handle the 1099s? Do we submit 1099s for the LLCs or for the individuals who received compensation?

–Perplexed

Dear Perplexed,

Here’s how the IRS says to handle 1099s for LLCs:

For a single-member limited liability company (LLC) (including a foreign LLC with a U.S. owner) that is disregarded as an entity separate from its owner under Regulations section 301.7701-3, enter the individual’s name only on the first name line and the LLC’s name on the second name line. For the TIN, enter the individual’s SSN (or EIN, if applicable). If the LLC is a corporation, partnership, etc., enter the entity’s EIN.

Tax Information and Resources

Get started image

Ready to get started?

Get the expert support you need

Start Now

Related Articles

7 Tax Deductions for Self-Employed Business Owners

by Tim Parker, on March 13, 2023

Income Tax Basics for Gig Workers

by Tim Parker, on July 20, 2022

Who Can Take the Home Office Tax Deduction?

by Janet Attard, on March 13, 2023

Estimated Taxes: A Primer for New Business Owners

by A. Lynn Bertrand, on March 13, 2023

Selling Your Business – Deal Structure and Taxes

By David M. Kauppi, on March 13, 2023

How Tax Reform Changes Alimony and Lawsuit Tax Obligations

by Jonathan Medows, on March 13, 2023