Can sole proprietor use their SSN to issue 1099-Misc

[ramr...@gmail.com]

Photographer pays others to edit some photos. She has w-9 information for the one person she paid more than $600. She is sole proprietor who is not otherwise required to have an EIN. But just double checking that since form says Payers TIN using her own SSN is acceptable.

Thanks for your help.

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

[Arthur Rubin]

On Tuesday, January 28, 2020 at 6:44:14 PM UTC-8, ramr...@gmail.com wrote:
> Photographer pays others to edit some photos. She has w-9 information for the one person she paid more than $600. She is sole proprietor who is not otherwise required to have an EIN. But just double checking that since form says Payers TIN using her own SSN is acceptable.

Exactly. It may be wise to get an EIN, though, as some states require similar reporting with a state employer ID, and the state ID may be easier to apply for with an EIN.

--
Arthur Rubin, Brea, CA

[Stuart O. Bronstein]

ramr...@gmail.com wrote:

> Photographer pays others to edit some photos. She has w-9
> information for the one person she paid more than $600. She is
> sole proprietor who is not otherwise required to have an EIN. But
> just double checking that since form says Payers TIN using her own
> SSN is acceptable.

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:

https://www.irs.gov/pub/irs-pdf/fss4.pdf

The instructions are here:

https://www.irs.gov/pub/irs-pdf/iss4.pdf

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

https://www.irs.gov/businesses/small-businesses-self-employed/apply-
for-an-employer-identification-number-ein-online

--
Stu
http://DownToEarthLawyer.com

[John Levine]

In article <XnsAB535B5504213s...@130.133.4.11>,

Stuart O. Bronstein <spam...@lexregia.com> wrote:
>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.

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
--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

[Stuart O. Bronstein]

"John Levine" <jo...@taugh.com> wrote:

> 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.

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

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.

--
Stu
http://DownToEarthLawyer.com

[John Levine]

In article <XnsAB537CF37A454s...@130.133.4.11> you write:
>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.

Worth a try.

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

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

--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

[ramr...@gmail.com]

On Wednesday, January 29, 2020 at 12:20:44 PM UTC-8, Stuart O. Bronstein wrote:
> "John Levine" <jo...@taugh.com> wrote:
>
> > 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.
>
> 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 long term solution seems to be to move everything into my
> > single member LLC.
>
> 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.
>
> --
> Stu
> http://DownToEarthLawyer.com

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?

[Stuart O. Bronstein]

ramr...@gmail.com wrote:

> 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.

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.

> 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?

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.

--
Stu
http://DownToEarthLawyer.com

[John Levine]

In article <XnsAB53C7457EA88s...@130.133.4.11>,

Stuart O. Bronstein <spam...@lexregia.com> wrote:

>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.

--
Regards,
John Levine, jo...@taugh.com, Primary Perpetrator of "The Internet for Dummies",
Please consider the environment before reading this e-mail. https://jl.ly

[Stuart O. Bronstein]

"John Levine" <jo...@taugh.com> wrote:
> Stuart O. Bronstein <spam...@lexregia.com> wrote:

>>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.

--
Stu
http://DownToEarthLawyer.com