How to Use EIN as Social Security Number
How to use EIN as Social Security Number is a common question. Your business EIN is similar to a person's SSN, but can you use one for another?4 min read
2. How to Get a Free EIN Online Instantly
3. Using Your EIN Number
4. Is It Possible to Cancel an EIN ID number?
5. How an EIN Can Protect You from Identity Theft
6. Steps in Creating Separate Credit Profile
Updated November 2, 2020:
How to use EIN as Social Security Number is a common question among entrepreneurs. Your business EIN is similar to a person's Social Security Number, but can you use one for another?
What Is EIN?
EIN means Employer Identification Number. It is also known as a Federal Employer Identification Number (FEIN), Tax Identification Number (TIN), or Federal Tax Identification Number. An EIN consists of a unique, 9-digit number, which the IRS issues to businesses as a form of identification for tax purposes. Your business requires an EIN for a wide range of activities and processes throughout its life.
While an EIN is primarily issued to corporations, nonprofits, LLCs, and other forms of businesses, an individual can also obtain it. You do not even need to own an LLC or other incorporated business to get an EIN. Being self-employed with a Social Security Number makes you eligible for EIN. EINs and Social Security Numbers serve the same purpose; they are used for filing taxes and applying for credit.
How to Get a Free EIN Online Instantly
The IRS issues Employer Identification Numbers (EINs) free. It is possible to obtain one instantly when you apply through the IRS website by following these steps:
- Visit the IRS EIN application page via this link.
- Complete the application process.
- The IRS will issue you an EIN instantly if you are eligible.
Using Your EIN Number
In addition to filing taxes, you need an EIN for the following processes:
- Open a business bank account.
- Obtain credit in the name of the company.
- Recruit employees and create a payroll.
- Obtain local permits and licenses.
- Use an EIN instead of Social Security Number (SSN).
- Establish a Keogh plan.
- An EIN also protects your privacy. Using your Social Security Number for business increases the risk of identity theft, tax, and liability problems.
Is It Possible to Cancel an EIN ID number?
Once the IRS issues an EIN in the name of your business, the company retains the number throughout its life cycle.
How an EIN Can Protect You from Identity Theft
A Social Security Number is a useful tool for compiling an individual's credit history because every US consumer has one. The identifying elements of an SSN include your name, variations of your name, as well as your previous and current addresses.
You can add a fraud alert if you have a credit profile. An initial security alert is valid for 12 months and prompts lenders to verify your identity because you suspect somebody might be trying to defraud you. On the other hand, a victim statement has a seven-year duration and declares you as an identity theft victim. Before attaching a victim statement, it is essential to report the identity theft at an appropriate agency like the local police department.
You can use an EIN instead of an SSN on W-9. You are required to file a W-9 form with any company that pays your more than $600 per annum. The company files the IRS form 1099-MISC and sends you a copy. You are also allowed to file Form 1099-MISC with your SSN or an EIN.
Your SSN should be protected at all times because it contains sensitive personal information which fraudsters can use to create credit cards, falsely collect loans, secure lines of credit, and perpetrate taxpayer identity theft while claiming a refund in your name. It is not possible to use an EIN for these purposes.
Because lenders and credit rating agencies know the difference between an SSN and EIN, it reduces the potential of damaging your credit rating even if fraudsters can access your personal information. To avoid any confusion between the two numbers, create a distinct identity for your business and establish dedicated credit accounts under the business name.
Steps in Creating Separate Credit Profile
- Create a separate address for your business. It can be as simple as opening a P.O Box. A business telephone is also ideal. Make sure your business address and phone number are in your state of incorporation. The business addresses and phone number establishes your business as a separate entity to lenders.
- Use your EIN to open business accounts with suppliers, vendors, and other business transactions.
- Use your EIN instead of SSN to open small lines of business credit, and ensure that the credit agencies get the lines of credit report. Once you have opened the accounts, maintain good standing by paying all business purchases within the net-pay period, and this will boost your credit score.
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