I have been working from home since the 1980s and a few years ago I started using an employer tax identification number for my tax identification number. I know many individuals working from home electing to use their social security number for their tax identification number. Which number is better to use? Why use one over the other?
Both the EIN number and the social security number are tax identification numbers used when filing taxes. Everyone born in the U.S.A. is assigned a social security number (SSN), which is a personal tax identification number shortly after birth. This number follows you all your life and is given to employers when you are hired so they can file the appropriate paperwork with the Internal Revenue Service (IRS). Employees list it when they fill out job applications and employers list it on W2 and 1099 tax forms. If you are a freelancer or work from home you may give out your SSN to clients unless you have a Employer Identification Number (EIN) and then that number would be given instead.
If you are a self-employed person filing for an EIN allows you to keep your personal income separate from business income by using the EIN number for all business income and the social security number for all personal income.
A benefit of having an EIN number is that you can give the EIN number instead of your social security number in case you are worried about identity theft.
Filing for an EIN is simple and only takes a few seconds online to complete the application, check out the source link to file for your EIN.
The IRS help line is there to answer any questions people have about the EIN and if it would be best to file taxes using this number or not. The important thing is that if you work from home as an entrepreneur that you do file your taxes every year. Use your social security number or an EIN for your tax identification number; the IRS accepts both on U.S. tax forms. The EIN protects your identity by giving you an option of not using the social security number. It is nice to have the option of using an EIN if you have both personal income and business income. Ultimately the choice of which tax identification number to use is your decision to make. I use the EIN because I feel secure using it instead of my social security number when needing to use a tax identification number with clients that I have just met. It is also nice to know that my business income is separated from my personal income. Having the EIN makes my life simpler and we all prefer that don’t we?
IRS.gov Employer ID Numbers (EINs) http://www.irs.gov/businesses/small/article/0,,id=98350,00.html