Is My SSN My Tax ID Number if I’m a Sole Proprietor?

A Sole Proprietor is a type of business owned and operated by a single individual; there is no legal distinction between the owner and the business.

A Social Security Number (SSN) is an acceptable Tax ID for a Sole Proprietorship; however, there are instances when obtaining an Employer Identification Number (EIN), is required or recommended, particularly if the business owner wishes to engage in certain types of business activities. 

For example, a Sole Proprietor will need to apply for an EIN if he/she wishes to hire employees and establish a payroll. Moreover, if the individual wishes to open accounts in the company’s name or acquire credit, banks and lending agencies will request this kind of Tax ID as well.

In some cases, an SSN can be enough to form and operate a Sole Proprietorship, but there are many reasons to apply for an EIN and having it available should you need to do any of the aforementioned tasks. 

The other advantage of using an EIN in lieu of an SSN is privacy. When clients are asked to pay an invoice, they will need information from you — including an SSN — to make payments. Sending sensitive information like your SSN to clients may increase your chances of identity theft.

An EIN allows your business to operate under a Tax ID number that is separate from your personal SSN and can help protect your online privacy and personal identity from criminals.

Sole Proprietor EIN application

Sole Proprietors can certainly be formed and function without EINs, but it’s likely that you’ll need to apply for an EIN at some point. Obtaining an EIN for your Sole Proprietorship has never been easier. GovDocFiling allows you the freedom to simply enter your information online, and our EIN/Tax ID specialists take care of filing all appropriate paperwork with the IRS. We help you avoid common mistakes to get things done right the first time. Online applications are usually processed within 24 hours, and you can check the status of your order at any time.