Social Security Number instead of an EIN?
This is a common question that most Individuals have when going into business and the short answer to this question is you do not need to apply for an EIN if you are a sole prop and you are not planning on hiring any employees and your business income will be reported as your personal income.
When You Will Need an EIN instead of using your social security number?
If you are a company that has or is planning on hiring employees or you are doing a joint partnership with another person then you will more than likely need to have an employer identification number. Your personal information is not out there for public to view. It keeps business and personal separate, for tax purposes.Allows you to grow your business, weather you’re hiring new employees or applying for credit for your business. You will be able to show more accurate reported earnings for the business if you ever decided to sell on a later date.
Most cases for small or new businesses a tax id number is not needed when a business is newly established, but most businesses employ anywhere between 2-4 workers or are planning on expanding their brand and with that being said more than likely you will need to complete a tax application form and apply for an EIN.